DETROIT -- Two large North American suppliers today announced increases in their shareholder dividens.
Johnson Controls Inc., the parent company of North Americas fourth-largest auto supplier, Wednesday said it will raise its stock dividend by 12 percent. Its the 31st consecutive year the company has increased its shareholder payout.
Johnson Controls, of Milwaukee, said it raised its quarterly dividend to 28 cents a share. The previous payout was 25 cents. The dividend is payable Jan. 3 to shareholders of record on Dec. 14.
Meanwhile, BorgWarner Inc., which makes engine and drivetrain components, announced a 14 percent increase in its quarterly cash dividend to 16 cents per share. The dividend is payable on Feb. 15, 2006, to shareholders of record on Feb. 1, 2006.
That will raise BorgWarners annualized dividend from 56 cents to 64 cents.
Johnson Controls said its expected annual dividend rate for fiscal 2006 now is $1.12, up 12 percent from the $1 a share paid in 2005.
The dividend boosts are notable because many U.S.-based suppliers are facing reduced earnings and bankruptcies. But Johnson Controls has continued to improve and diversify its business, primarily in the interior systems, seating, electronics and battery business.
The increase reflects our double-digit increases in 2005 sales and income, continued strong cash flows and outlook for double-digit improvements in 2006 and beyond, CEO John Barth said in a press release.
Our ability to embrace change has long been a key to the success of Johnson Controls, Barth said.
BorgWarner of Auburn Hills, Mich., has posted similar increases in cash flow.
Our strong cash flows and confidence in our future growth enable us to provide additional shareholder value, CEO Timothy Manganello said in a press release. Even with this increase, we expect to maintain our strong investment grade capital structure for future internal and external growth opportunities.
Johnson Controls automotive unit ranks No. 4 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $19.50 billion in 2004. The automotive unit is in Plymouth Township, Mich.
BorgWarner ranked No. 22 on the list with 2004 North American sales of $1.91 billion.
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