PC maker Dell set to pay dividends

 

DELL, WHICH initiated its first dividend yesterday, will use acquisitions to add products for corporate customers and curb reliance on personal computers, a business battered by competition from smartphones and tablets.

Dell plans to boost revenue from data-centre products and technology services 45 per cent to $27.5 billion by fiscal 2016, Dell said at a meeting with analysts today in Austin, Texas. Over that four-year period, PC- related revenue will climb 8.3 per cent to $47 billion. Dell’s 8-cent-a-share quarterly dividend may help retain current shareholders and lure institutional investors as the company works to revive sales.

CEO Michael Dell has been acquiring makers of data storage, networking equipment and business software to diversify beyond PCs and will continue to use deals to boost revenue. “The new dividend will keep investors satisfied during this transition period,” said Brian White, an analyst at Topeka Capital Markets in New York, in a research report today. He upgraded Dell to buy from hold and raised his price estimate to $15.75 from $13.50. The shares rose 3.8 per cent to $12.42 at 2.03 pm in New York. – (Bloomberg)