Icahn Enterprises L.P. (NYSE: IEP) announced that the Board of Directors of its general partner has approved a modification to the Company’s distribution policy to provide for an increase in the annual distribution from $1.40, comprised of $0.40 in cash and $1.00 in depositary units, to $4.00 per depositary unit, payable in either cash or additional depositary units, at the election of each depositary unit holder.
The Board of Directors of the general partner has declared a quarterly distribution for the first quarter of 2013 in the amount of$1.00, which will be paid on or aboutApril 15, 2013to depositary unit holders of record at the close of business onFebruary 21, 2013. Depositary unit holders will have untilMarch 14, 2013to make an election to receive either cash or additional depositary units; if a holder does not make an election, it will automatically be deemed to have elected to receive the dividend in cash. Depositary unit holders who elect to receive additional depositary units will receive units valued at the volume weighted average trading price of the units on NASDAQ during the 20 consecutive trading days immediately following the election deadline. No fractional depositary units will be issued pursuant to the dividend payment.
The new annual dividend will result in a dividend yield of 5.86% at the stock’s current price. Icahn Enterprises is up 55% over the past 52 weeks. Icahn Enterprises L.P. (NYSE: IEP) has an equity summary score of 10 out of 10 for a VERY Bullish outlook.
Carl C. Icahn, the Chairman of Icahn Enterprises and the holder of approximately 93% of the outstanding depositary units, is known for his investor activist actions to increase the profit of companies that he buys large share positions in to sell when the value increases. For those investors wanting to follow Icahn, it is best to purchase IEP rather than to buy into the stocks he invests in.
Mr. Icahn stated: “I’m very proud of the performance of Icahn Enterprises. Since Icahn Enterprises adopted an activist philosophy, the trading price of Icahn Enterprises’ depositary units has risen from $7.625 on December 31, 1999 to $59.95 on February 8, 2013, the last trading day before this announcement – an increase of approximately 817%, which translates to an annualized return of approximately 18% for those who owned the stock through that period (including reinvestment of distributions into additional depositary units and taking into account in-kind distributions of depositary units). Comparatively, the S&P 500, Dow Jones Industrial and Russell 2000 indices increased only approximately 32%, 66% and 116%, respectively, over the same period, which translates to an annualized return of only approximately 2%, 4% and 6%, respectively (including reinvestment of distributions into those indices).
Over the last few years, we have had substantial earnings and cash flow. We believe that our strategy will continue to produce strong results in 2013 and into the future, and that belief is reflected in the Board’s decision to increase our quarterly distribution. We believe that the strong cash flow and asset coverage from our operating subsidiaries will allow us to maintain a strong balance sheet and ample liquidity. We have provided unit holders with a choice between taking distributions in cash or in additional depositary units so that those who wish to increase their participation in the future of our business may do so.”