Dividend Increase – Archer Daniels Midland (ADM)

On February 6th, Archer Daniels Midland. announced a dividend increase of 4.7%. This will increase their dividend from $0.32 to $0.335. It is payable on March 13th for shareholders of record on February 20th.

This will mark the 42ndh consecutive annual dividend increase. With a payout ratio around 58% I think they will be able to continue this streak for many more years to come.

Archer Daniel Midland is currently offering a dividend yield of 3.17%. ADM has been facing some challenges lately with their profit margins. They have been raising production but the weak margins have been hurting them.

There have been media reports that they are looking at acquiring Bunge which would help them with growth in South America. I think it is wise for them to not only look for growth but to look for effective growth. This will help them strengthen their position in a foreign market and should help them increase their revenue.

So despite being in a rough period right now, I think they are making some smart moves to better their position and to increase their margins.

A small dividend increase will not affect my income a whole lot since I don’t have a large position in the company. With this increase it will add an additional $0.18 to my quarterly dividend and will add $0.74 to my projected annual dividend income. This is not taking into account the compounding factor.

At the current time, Archer Daniels Midland is priced very close to my cost basis. It is definitely a stock that I am considering to strengthen. It is a great company with a long track record of rewarding its shareholders.

Regardless of how large or small, I love all dividend increases. That is how we end up with More Dividends 😉

Do you currently hold any stock in Archer Daniels Midland? What do you think of this dividend increase? Just let me know in the comments.

As always I look forward to reading all of your comments and questions, until then….. happy investing!

-Jason from MoreDividends.com

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