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We reestablished quarterly dividend payments
in the first quarter of 2003 with a quarterly payment of $0.10
per share. We increased that dividend three times since, leading
to our current rate of $0.25 for the first quarter of 2004—an
increase of 150% over our first quarter 2003 dividend. With
interest rates expected to rise this year and mortgage production
levels expected to fall, we’re forecasting little change
in earnings per share for 2004, in contrast to the 27% compounded
annual growth rate we recorded over the previous 11 years. Given
this outlook, I favor continued strong increases in the dividend
rate during this period to reward our loyal shareholders, at
least until we begin to resume EPS growth at a more normalized
rate. With our current payout ratio under 35%, we still have
a lot of room to grow. And IndyMac’s current dividend
yield of approximately 3% is very attractive compared to the
1.5% yield of the S&P 500 Index. |
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