So much for a double-dip recession, or at least that is what the waves of new share buybacks and dividend hikes from big key companies are saying.  In recent days we have watched more dividend hikes and share buybacks.  Share buybacks have been announced by Bunge Ltd. (NYSE: BG), Forest Laboratories Inc. (NYSE: FRX), Intermec Inc. (NYSE: IN), KBR Inc. (NYSE: KBR), Monsanto Co. (NYSE: MON), and Viacom Inc. (NYSE: VIA); and that follows the large buyback from Wal-Mart Stores Inc. (NYSE: WMT).  As far as dividends are concerned, we have seen dividend hikes from the likes of Caterpillar Inc. (NYSE: CAT), FedEx Corporation (NYSE: FDX), and Target Corp. (NYSE: TGT).  We have outlined the impact and the relative value of each.

SHARE REPURCHASES

Bunge Ltd. (NYSE: BG) is trying to say all is well in soy beans because it approved a stock buyback plan for up to $700 million in common shares.  With a $7.3 billion market cap, this is about a 10% share buyback now that its common stock has lost one-third of its value from the $74.04 high of the last year.

Forest Laboratories Inc. (NYSE: FRX) has a bit of an unusual buyback, because it signed an agreement with Morgan Stanley (NYSE: MS) to repurchase up to $500 million in shares as part of an accelerated buyback plan that is part of an existing larger 50 million share buyback.  The larger plan is more than 15% of the outstanding shares.  With shares still under $25.00, this is still down about 25% from the $33.10 high of the last 52-weeks.

Intermec Inc. (NYSE: IN) won’t sound like much on the surface as it is only a repurchase plan of up to $75 million.  The difference here is that the market cap is a mere $645 million now that shares have fallen by almost 20% from the yearly high.  Despite earnings issues before, Intermec has over $200 million in cash and securities on the books and it has little debt.

KBR Inc. (NYSE: KBR) may be less exciting than others as it will repurchase up to 10 million shares.  Without a specific schedule, the company said that it plans to keep the number of shares outstanding around the 150 million share level.  The stock’s 11% gain today to $22.10 has it at the higher-end of the $16.29 to $24.73 range of the last year.

Monsanto Co. (NYSE: MON) has authorized a $1 billion share buyback program that will begin in July after it completes its existing $800 million plan.  Also thrown in was some reassurance on its guidance for the year ahead of ‘mid-teens’ earnings growth, which is probably good for investors to know considering that its shares have nearly come down by half from the $87.40 high of the last 52-weeks.

Viacom Inc. (NYSE: VIA) is a Sumner Redstone special of more to come… or more to resume.  Viacom approved a regular quarterly cash dividend of $0.15 per share, which comes to about 1.6% for a dividend yield.  More importantly, Viacom also authorized a resumption of its share buyback plan and it increased the amount to $4 billion for its B-shares after having suspended its buybacks during the recession to conserve on its cash.

Wal-Mart Stores Inc. (NYSE: WMT) was the largest sounding buyback on the surface last week at some $15 billion.

DIVIDEND HIKES

Caterpillar Inc. (NYSE: CAT) boosted its dividend by almost 5% to $0.44 per quarter from $0.42.  Despite the woes of the recession, it never did slash its payout after it hiked the dividend in early 2008.  Thomson Reuters has estimates of $3.15 EPS for 2010 and $4.65 EPS in 2011, so a $1.76 annual dividend should be easy to maintain.  The dividend yield here is now about 3%.

FedEx Corporation (NYSE: FDX) has also boosted its dividend payments this week by $0.01 to $0.12 per quarter.  Unfortunately, this is still a very low yield because after looking at the $78-handle on the stock it is only a yield of about 0.62%.  With Thomson Reuters earnings estimates of $3.74 EPS in 2010 and $5.06 EPS, this is a rather low payout considering its payout will be $0.48 per share per year.  Perhaps after sector labor issues are resolved it can revisit this low payout.  Rival UPS has a dividend yield of close to 3%.

Target Corp. (NYSE: TGT) was the big dividend gainer.  The retail giant hiked its payout by almost half up to $0.25 per quarter from as the cash generation easily exceeds its reinvestment demands.  The yield before was only 1.3%, but the new yield now is going to be about 1.9%.

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JON C. OGG

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