Thanks to the improved profit margins, strong cash flow and an unmatched array of products, PetSmart's stock could climb by 29% during the next year or so.

The top dog dividend last week was PetSmart, the nation's largest specialty retailer of services and products for pets. Citing "significant free cash flow," PetSmart more than tripled its quarterly common payout, to 10 cents a share. In addition, the 23-year-old Phoenix company (PETM) authorized a $350 million stock buyback, which represents 13% of its $2.6 billion market capitalization. The repurchase plan runs to January 2012. PetSmart's new dividend is payable Aug. 14 to holders of record July 31; the ex-dividend date is July 29. Disbursements were initiated in June 2003 at two cents a share and hiked to three cents in March 2004, where they sat until Tuesday. Bob Moran, PetSmart's newly installed CEO (he had been chief operating officer since 2001), said "the stability and predictability of our cash flow demonstrates the continued strength of our business," despite the shaky economy. The American Pet Products Association estimates the 2009 pet-care market at roughly $45.4 billion, up more than 165% since 1994. PetSmart plans to add about 40 stores a year (down from around 100 in the past) for the foreseeable future, says Moran, and to reinvest in existing outlets to improve same-store sales growth and gross margins. In fiscal 2010's first quarter (ended April 30), net climbed 15.6% from the level a year earlier, to 37 cents a share (analysts' consensus guess had been 30 cents), on a 9.5% sales advance, to $1.33 billion. In the quarter, PetSmart spent $3.8 million on dividends and $25 million on share repurchases.

a 233% dividend increase and plans to repurchase $350 million of its shares, increasing its dividend to 10 cents per share from 3 cents per share beginning in the second quarter. The dividend is payable Aug. 14 to shareholders of record as of the close of business July 31.

Longview Asset Management reported ownership of 6,639,368 shares (5.2%) after buying 601,100 on May 21 at $20.32 each.

The Real Story Wrap: November 20: Thursday's session on Wall Street was volatile again as traders digested more gloomy data and dealt with continuing worries about the future of Detroit's carmakers.
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Q: What kinds of retailers are best positioned to weather this storm?

Balter: The smaller the ticket, the lower the cost of the item, and the more of a necessity it is, the more likely you are going to buy it. So in my coverage area, it is [do-it-yourself auto companies] such as Advance Auto Parts (AAP), AutoZone (AZO) or O'Reilly Automotive (ORLY) because their products are required. Right behind them is PetSmart (PETM), because you are probably going to continue to feed your pet. But in terms of selling necessities, all of those trail Wal-Mart, Family Dollar Stores (FDO) and Costco Wholesale (COST).

I have 14 pets getting some of my $ back

PE of 16.77 and a PEG of 1.04. It pays a yield of 0.50%.

PetSmart (PETM) was upgraded from neutral to overweight, JPMorgan said. $29 price target. Upgrade is based the company's strong position in a difficult consumer environment, the sales/margin benefit of food inflation, margin-enhancing process improvements and a favorable 2-1 risk reward scenario.

Bounces up/down a lot, so swinging with it.