Dividend Sonar Report – May 5, 2014
One of the most interesting dividend actions last week was the dividend termination at Herbalife (HLF).
Herbalife’s products, which include protein shakes and snacks, energy and fitness drinks, vitamins and nutritional supplements, and a complete bath and body care line, are available exclusively through Herbalife members in over 90 countries.
Herbalife has been in the news a lot due to the feud between Bill Ackman, Founder of hedge fund Pershing Square Capital Management, and famed investor Carl Icahn. Ackman has called Herbalife a pyramid scheme (Ponzi scheme).
Icahn, on the other hand, is now the company’s largest shareholder. He is also supportive of Herbalife’s decision to suspend its dividend and, instead, utilize cash to repurchase stock.
Herbalife may not be in dire straits financially, but it's important to keep in mind just how poorly dividend cutters and eliminators perform.