Avery Dennison Ready to Boost Payout in Second Half, CEO Scarborough Says
Avery Dennison Corp., the maker of labels for blue jeans and beer bottles, will be ready to boost its dividend this year after slicing it in half in 2009 to pay down debt, Chief Executive Officer Dean Scarborough said.
“We will be in position to return cash to shareholders in the back half of the year,” Scarborough, 54, said yesterday in a telephone interview. The company may combine a dividend increase with a share buyback, he said.
Avery Dennison, which gets most of its free cash in the second half, is meeting its goal of paying down $350 million in debt by the end of 2010 and maintaining its credit rating, the CEO said. Board members also will develop a better sense of how the global economy is faring as the year progresses, he said.
The company, based in Pasadena, California, may raise its quarterly dividend to 25 cents a share from 20 cents, according to data compiled by Bloomberg. Avery Dennison slashed its dividend from 41 cents last year.
The label maker has no plans for acquisitions in the near term, and doesn’t expect any as large as the $1.34 billion purchase of Paxar Corp., a supplier of merchandise-tracking systems that it bought in 2007, “for a long time,” the chief executive said.
Avery Dennison advanced 72 cents, or 2.2 percent, to $33.77 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have declined 7.5 percent this year.