Avnet Raises Quarterly Dividend 5.7% to $0.37

Avnet Inc. raised its quarterly dividend 5.7% to $0.37 a share from $0.35, lifting the indicated annual dividend to $1.48. The shares traded ex-dividend on September 9, 2026.

Why the dividend changed

Avnet described the increase as part of its commitment to consistent shareholder returns. Chief Executive Officer Phil Gallagher said the decision was supported by the company’s financial strength and disciplined approach to allocating capital between shareholder distributions and investment for long-term growth. The dividend announcement did not tie the increase to a specific earnings or cash-flow target.

The timing followed a sharp improvement in Avnet’s operating results. Fiscal fourth-quarter sales reached a record $8.3 billion, rising 48% from a year earlier, while diluted earnings per share increased to $1.49 from $0.07. Electronic Components produced a 4.1% operating margin, and Farnell’s margin reached 9.0%. Management said demand and mass-market activity were improving across regions, end markets and customer groups. Avnet also guided for fiscal first-quarter sales of $9.00 billion to $9.30 billion and adjusted diluted earnings per share of $2.80 to $2.90. Avnet’s fiscal 2026 results provide the operating backdrop for the board’s decision.

The cash-flow picture was less straightforward. Avnet used $280.9 million of operating cash in fiscal 2026 as stronger sales required more working capital, including inventory and receivables. Management said that growing distributors typically consume cash to finance working capital and that future inventory conversion and available borrowing capacity would support liquidity needs. The company had $1.19 billion of combined availability under its credit and receivables programs at fiscal year-end, according to its 2026 annual report.

Dividend track record

The increase extends Avnet’s dividend-growth streak to 13 consecutive years. The annual total rose from $0.84 in 2020 to $0.91 in 2021 and $1.10 in 2022. Growth then moderated, with annual totals of $1.20 in 2023, $1.28 in 2024 and $1.36 in 2025. The respective annual increases were 8.3%, 20.9%, 9.1%, 6.7% and 6.3%, showing steady growth after the larger step in 2022. The five-year record amounts to 10.1% annual growth.

The recent payment sequence also shows a deliberate cadence. Avnet paid $0.33 for the June 4, 2025 ex-dividend date, raised the rate to $0.35 for September 17, 2025 and held it there through June 3, 2026. The new $0.37 rate took effect with the September 9, 2026 ex-dividend date. That pattern indicates annual increases followed by several quarters at the same rate rather than frequent small adjustments.

Is the dividend covered?

The dividend consumes 35% of earnings. That payout ratio leaves most reported earnings within the business after the dividend, providing a substantial earnings cushion if profits fluctuate.

SmarterDividends rates the dividend A with a safety score of 94. The A grade means very safe, defined as a score of 80-100. The low earnings payout, long growth record and higher current rate support that assessment.

Cash conversion remains an important counterweight to the earnings coverage. Fiscal 2026 operating cash flow was negative because working-capital requirements rose with sales. That does not change the 35% earnings payout ratio, but it makes inventory, receivables and borrowing needs relevant when assessing the cash available for dividends and other capital returns.

Yield and valuation

At a share price of $98.97, Avnet’s forward yield is 1.46%, compared with a 1.38% median for the Technology sector. The stock has recorded a 98.4% gain over one year, reducing the income yield that shareholders receive for each dollar invested despite the higher dividend rate.

SmarterDividends estimates fair value at $81.96 and assigns Avnet a fair valuation verdict. The estimate expresses the gap as 15% downside. The company’s market value is $8.1 billion.

What to watch

The next operating checkpoint is Avnet’s fiscal first quarter ending October 3, 2026. Its guidance calls for sequential sales growth of approximately 10% at the midpoint, with growth across all Electronic Components regions and Farnell. Reported sales, margins and adjusted earnings against that guidance will show whether the operating improvement behind management’s confidence continued.

Working-capital performance is equally important. Inventory days declined to 71 in the fiscal fourth quarter, but Avnet still used operating cash over the full year. Future results will show whether inventory and receivables begin releasing cash as management expects. Investors can also monitor the balance between dividends, share repurchases and investment spending. Avnet had $225.8 million remaining under its repurchase authorization at fiscal year-end, while all future quarterly dividends remain subject to board approval.