Denver-based Qwest announced today that it will issue a quarterly dividend of 8 cents a share in February, its first in more than six years.
The company also said chief executive Ed Mueller, who succeeded former CEO Dick Notebaert in August, will detail his much-awaited strategic plan Monday.
The quarterly dividend is payable on Feb. 21 to all stockholders of record at the close of business on Feb. 1. The board expects to pay a quarterly dividend going forward, Qwest said.
The dividend, which translates into an annual yield of about 4.5 percent, was higher than some analysts had anticipated.
Janco Partners analyst Donna Jaegers said she expected an annual dividend of 20 cents to 24 cents. JP Morgan analyst Jonathan Chaplin said this week he was expecting at least 29 cents a share.
The dividend announcement, which was made after the markets closed, pushed Qwest stock up 6 percent during after-hours trading to $7.40.
“This is very good news for all shareowners, but particularly retirees,” said Nelson Phelps, executive director of the Association of US West Retirees. “Many retirees invested in Qwest, and before that US West, stock for the dividend.”
Qwest acquired US West in June 2000.
The company last issued a dividend in June 2001. It was officially scrapped in 2002 amid an accounting scandal and the tech downturn.
“The company is in a position once again to fulfill its longstanding commitment to reward its shareholders,” said Mueller in a statement. “This action reflects the ongoing strong performance of the company, the outstanding efforts of its employees and the confidence customers have in Qwest products and services.”
In October 2006, Qwest launched a 2-year program to buy back up to $2 billion in Qwest stock. The company expects to complete about 70 percent of the program by the end of the year.
Andy Vuong: 303-954-1209 or avuong@denverpost.com
