Shares of Hewlett-Packard Company (NYSE:HPQ) opened up high today on account of a healthy dividend declared by the company and were last trading at $22.98, up 0.3% from its last close.
The world’s biggest PC manufacturer approved a dividend of 14.52 cents a share, up 10% over the last dividend it declared. The last declared dividend was 13.20 cents a share. With about 2 billion shares outstanding, this increase will cost the technology company an additional outlay of $106 million a year. The increased dividend as approved by the board is expected to be declared in May. This move is also seen as an attempt to put an end to the fall in the company’s share price, which has eroded over $35 billion from its market cap during the past year. The announcement came a day after Hewlett-Packard Company (NYSE:HPQ)’s Shareholders meeting where 5 of its 11 board members’ reelections were challenged.
Earlier last month, Hewlett-Packard Company (NYSE:HPQ) reported its first quarter results, where its earnings declined by nearly 16% mainly due to weak demand of its products. The reason, as believed for its weakening sales, is understood to be increased competition from peers putting pressure on PC prices, availability of alternative products like smart phones, tablets and the general instability of emerging markets.