Disney (DIS) Boosts Dividends by 50 percent

The wonderful world of Disney just got a little bit better for its shareholders.

Disney (NYSE: DIS) has increased its annual cash dividend payments by 50% to 60 cents a share, the company’s largest dividend increase in more than a decade. And more increases could be on the horizon.

According to Barron’s, Disney is sitting in a healthy cash position, and has plenty of room to continue increasing its dividend payouts to investors. Writer Dimitra Defotis says that Disney’s current dividend payout is only 20% of the company’s free cash flow.

Better yet, more cash appears to be on the way: Disney’s capital expenses will fall next year, which Telsey Advisory Group analyst Jaison Blair predicts will help improve the company’s free cash flow by 35% in the next two years. It’s reasonable to the think that Disney will pour some of that excess cash into dividends, especially given the company’s recent dividend hike.

The latest increase brings Disney’s dividend yield up to 1.6%. Another increase like that and the company’s dividends will exceed their 10-year high of 1.93%.