Kroger raises dividend, to boost implied yield to above 2.5%

Shares of Kroger Co.
KR,
+0.11%
rose 0.2% in midday trading Thursday, after the grocer raised its quarterly dividend by 11.5%, to 29 cents a share from 26 cents a share. Based on current stock prices, the new annual dividend rate implies a dividend yield of 2.53%, which compares with the Consumer Staples Select Sector SPDR exchange-traded fund’s
XLP,
+0.35%
yield of 2.52% and the implied yield for the S&P 500
SPX,
+0.08%
of 1.57%. “Our business continues to generate strong and consistent free cash flow and has proven to be resilient in a variety of operating environments,” said Chief Executive Officer Rodney McMullen. “The strength of our balance sheet provides significant financial flexibility to continue to invest in our business to drive growth.” Kroger’s stock has gained 2.7% to date, while the consumer staples ETF has slipped 0.6% and the S&P 500 has advanced 13.9%.