Disney May Boost Its Stock Dividend, Eisner Suggests

Walt Disney Co. Chief Executive Michael Eisner suggested Friday that the company probably would raise its stock dividend for the first time in six years because of a stronger balance sheet.

Eisner’s comments, made during a question-and-answer session at the annual Allen & Co. media conference in Sun Valley, Idaho, follow similar recent hints dropped by Chief Financial Officer Thomas Staggs.

Management probably would recommend an unspecified increase from Disney’s current annual payout of 21 cents a share, Eisner said. The board probably won’t consider the matter until year’s end.

Patrick McGurn, senior vice president with Institutional Shareholder Services, noted that the slashing of tax rates on dividends last year prompted many firms to raise payouts.

Eisner’s remarks come as Disney executives have been working to repair the damage from a stinging 45% no-confidence vote that Eisner suffered at Disney’s annual shareholder meeting in March.

About 65% of Disney’s stockholders are large institutions, in line with other major corporations. But Disney also has an unusually large number of investors who own just a handful of shares, owing to the stock’s novelty and its popularity as a gift for children.

Disney shares rose 25 cents to $24.60 on the New York Stock Exchange. The current dividend translates into an annualized yield of 0.9% at that share price.