John Wiley Rewards Investors With 3.3% Hike In Dividend

John Wiley & Sons Inc. JW.A continues to impress investors by increasing its quarterly dividend by 3.3% just two weeks after reporting better-than-expected earnings in the fourth-quarter of fiscal 2016. This is the 23rd consecutive year of dividend hikes by the company. This Hoboken, NJ-based company raised its quarterly dividend to 31 cents a share (or $1.24 annually) from the prior payout of 30 cents (or $1.20 annually).

The increased dividend will be paid on Jul 20 to stockholders on record as of Jul 6, 2016. Following, the news the company’s shares gained 1.8% on Jun 23, 2016. The dividend yield, based on the new payout and the last closing market price, is approximately 2.4%. In Jun 2015, John Wiley raised its quarterly dividend by 16% to 29 cents (or $1.16 annually) from 25 cents a share (or $1.00 annually).

Dividend hikes not only enhance shareholder returns, but also raise the market value of the stock. Through this strategy, companies try to win investors’ confidence and persuade them to either buy or hold the scrip instead of selling it.

The company’s management has also approved a share repurchase program of 4 million shares. In fiscal 2016, the company has repurchased 1.4 million shares worth $70 million at an average cost of $48.86.

John Wiley covers a broad spectrum of services including education, professional development and research. The company publishes around 1,600 journals and various books (both digital and print). It also offers several online services/products, which makes it one of the names to reckon in the publishing arena. However, with advancing technology, the relevance of the print media is on a decline. To adapt to this trend, John Wiley is metamorphosing to a more digital services oriented company. It has resorted to aggressive restructuring to boost margins and has laid emphasis on developing its IT infrastructure.

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The company is also focusing on building a more favorable product mix as digital services/ products generate higher margins and are likely to offset the declining revenues from print media.

Zacks Rank and a Stock to Consider

John Wiley, which shares space with Pearson (LON:PSON) plc (NYSE:PSO) and Thomson Reuters Corporation (TO:TRI) currently has a Zacks rank #3 (Hold). A better-ranked stock worth considering in this sector is Scholastic Corporation (NASDAQ:SCHL) , which holds the Zacks Rank #2 (Buy).