VERNON HILLS, Ill. - CDW Corporation (NASDAQ:CDW), a prominent supplier of IT solutions, has declared a quarterly cash dividend of $0.62 per common share, scheduled for payment on September 10, 2024, to shareholders of record by August 26, 2024. This announcement reaffirms the company's commitment to delivering shareholder value through its capital allocation strategy.
The company's Chief Financial Officer, Albert J. Miralles, emphasized the significance of dividends and share repurchases as a key component of CDW's capital allocation priorities, which also include strategic mergers and acquisitions and managing the company's capital structure.
Miralles highlighted the company's confidence in its earnings and cash flow generation, noting the substantial growth of the dividend since CDW's initial public offering in June 2013. Since then, CDW has increased its dividend nearly fifteen-fold and returned approximately $6.7 billion to stockholders through share repurchases and dividends.
CDW, a Fortune 500 company and a member of the S&P 500 Index, has been serving its customers in the business, government, education, and healthcare sectors across the United States, the United Kingdom, and Canada for 40 years. The company assists customers in navigating the complex IT market to maximize their technology investments.
The declaration of future dividends will remain at the discretion of CDW's Board of Directors. The company's forward-looking statements, including those regarding future dividends and strategic plans, are subject to various risks and uncertainties that could cause actual results to differ from expectations. CDW has advised that it does not undertake any obligation to update or revise its forward-looking statements, except as legally required.
This dividend announcement is based on a press release statement provided by CDW Corporation.
In other recent news, CDW Corporation's earnings and revenue have been the focus of recent analyst adjustments. Stifel raised its price target for CDW from $250 to $260, maintaining a "Buy" rating. Despite projecting a slight dip in second-quarter sales to $5.455 billion, the firm foresees modest growth in gross profit dollars by 1.1% year-over-year, driven by robust performance in cloud and service revenue.
On the other hand, Citi reaffirmed its Buy rating on CDW, maintaining a $260 price target. The firm's analysis suggests that CDW's shares have underperformed compared to its peers, noting a 15% decline over the past three months.
CDW Corporation has also been affected by recent cyberattacks on CDK Global (NASDAQ:CDK) Inc., a provider of car industry technology and software. CDK Global has been under attack from a hacker group demanding a multimillion-dollar ransom, leading to significant disruption for auto dealerships in the United States.
This has impacted numerous dealerships nationwide and is expected to result in a downturn in new vehicle sales for June 2024. CDW Corporation reported a challenging start to the year, with a decrease in gross profit by 2% year-over-year to $1.1 billion.
Citi and Stifel's assessments underline the potential for CDW Corporation's growth, despite the current challenges. The analysts cite the company's strong positioning for the upcoming PC and hardware refresh cycle and ongoing investments in cloud, security, and services as reasons for confidence in CDW's future prospects. These recent developments highlight the importance of CDW Corporation's strategic movements in the face of industry challenges and market fluctuations.
InvestingPro Insights
CDW Corporation's (NASDAQ:CDW) recent dividend declaration is a testament to its consistent shareholder returns, aligning with the InvestingPro Tip that CDW has raised its dividend for 11 consecutive years.
The company's commitment to capital returns is further evidenced by its impressive track record of maintaining dividend payments for 12 consecutive years, showcasing a reliable income stream for investors. With a market capitalization of $29.27 billion and a dividend yield of 1.07%, CDW remains a significant player in the Electronic Equipment, Instruments & Components industry.
InvestingPro Data indicates that CDW is trading at a P/E ratio of 26.86, suggesting a premium valuation relative to the market. This is further supported by a high Price / Book multiple of 13.7, which reflects the market's valuation of the company's net asset value. Despite a revenue decline of 7.67% over the last twelve months as of Q1 2024, the company has managed to maintain a gross profit margin of 21.88%, reinforcing its ability to control costs and maintain profitability.
For investors looking to delve deeper into CDW's financial health and future prospects, InvestingPro offers additional insights. There are 10 more InvestingPro Tips available for CDW at https://www.investing.com/pro/CDW, providing valuable information for making informed investment decisions.
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