Zacks_Analysts' Blog : Frisch's Dividend a Penny Up - Analyst Blog

Frisch's Restaurants Inc. (FRS) recently announced its decision to hike quarterly dividend by a penny to 16 cents per share, reflecting a 6.7% increase from the prior dividend payout. The increased dividend will be paid on October 10, 2011 to stockholders of record on September 26, 2011. This represents the 203rd consecutive quarterly dividend paid by Frisch's Restaurants and brings the new forward annual dividend yield to 3.22% as of September 12, 2010.

Frisch's Restaurants has a consistent track record of paying quarterly dividends even during the economic downturn. The company has reported profits every year since it went public in 1960, and has paid cash dividends to shareholders every quarter during this period. Since 2009, the company has been regularly increasing its dividend rate on a yearly basis. The last dividend hike of 15% to 15 cents was announced in September 2010. Prior to that, Frisch's announced a dividend hike of 8% in September 2009. Over a five-year period, Frisch's’ dividend has grown at a rate of 5.7%, reflecting a slightly slower pace than the industry average growth rate of 6.29%.

One of Frisch's Restaurants’ peers, Brinker International Inc. (EAT) recently increased its quarterly dividend by 14% to 16 cents per share. Frisch's Restaurants’ current forward annualized dividend yield inched past Brinker’s forward annualized dividend yield of 3.16% and trounced the industry average of 1.47%.

Frisch’s Restaurants, which operates under the name Frisch's Big Boy and Golden Corral, ended fiscal 2011 with $2.5 million in cash balance and a long-term debt of $22.6 million.

We appreciate Frisch's Restaurants’ efforts to consistently return long-term shareholder and franchisee value even amidst slower economic growth. We believe that an increase in dividend payment affirms the company’s optimistic outlook and depicts that it is heading toward strong future growth.