Feng Tay Enterprise Co (豐泰鞋業), which supplies about one-sixth of Nike footwear, yesterday announced a better-than-expected dividend payout to shareholders, which is likely to support its share price in the near term.
The Douliou (斗六), Yunlin County-based company said in a filing to the Taiwan Stock Exchange that its board had approved a proposal to distribute a cash dividend of NT$3.3 and a stock dividend of 4 percent.
The dividend payout was based on the company’s earnings last year of NT$2.3 million (US$75.8 million), or NT$4.13 per share, which translates into a cash payout ratio of 79.9 percent and a cash and stock payout ratio of 89.59 percent.
This year’s dividend payout is higher than last year’s, when the company offered shareholders a cash dividend of NT$2.2 and a stock dividend of 4 percent after it reported earnings per share of NT$3.14 for 2012.
Yuanta Securities Co (元大證券) analyst Peggy Shih (施姵帆) yesterday said in a client note that Feng Tay’s cash dividend payout ratio of about 80 percent is “significantly higher than its 10-year average cash payout ratio of 71 percent.”
With Feng Tay’s shares closing at NT$83.5 yesterday in Taipei trading, the planned dividend payout indicates a cash dividend yield of 3.95 percent and a dividend yield of 4.43 percent, both higher than average deposit rates offered by major banks in Taiwan of between 1.31 percent and 1.46 percent for one-year to three-year fixed savings.
Fengtay, established in 1981, also makes casual shoes for global brands such as Eddie Bauer, Rockport, Clarks and Cole Haan.
During the first two months of the year, the company reported an annual increase of 62 percent in earnings of NT$450.43 million, or NT$0.81 per share, with cumulative revenue rising 19.18 percent to NT$6.64 billion from a year earlier, company data showed.