Shares of Cliffs Natural Resources jumped after it more than doubled its quarterly cash dividend. Cliffs has grown rapidly through acquisitions in recent years and now has a wide variety of strong projects. As a result, the company said, it's now focusing on organic growth and returning value to shareholders.
Cliffs announced that it is raising its quarterly dividend by 123% to to $0.625 a share. The new dividend will be paid on June 1 to shareholders as of April 29. The company said the move marks a change in strategy away from its aggressive pursuit of growth through acquisitions and toward greater returns to shareholders.
In a statement, Cliffs' CFO, Laurie Brlas, said, "We believe that a philosophical commitment to this payout level and to growing the dividend is manageable through the cycle and sustainable at varying levels of prices for the commodities we sell." Commenting on the news, an analyst at Citi stated, "We welcome the dividend hike and official organic growth pledge, although management already deemphasized mergers and acquisitions following the Consolidated Thompson acquisition last year."
Cliffs Natural Resources (CLF : NYSE : US$69.56), Net Change: 4.65, % Change: 7.16%, Volume: 10,886,831