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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Hi Jason, I have a moderate sized position in ADM. I am a little disappointed in the smallish dividend increase. I like the potential in the Bunge merger. I think scale means a lot in a commodity type business. I also like ADM as a diversifier in my portfolio. It is not in one of your typical dividend paying industries that many of my holding reside in like REITs, utililites, consumer goods, etc. The downside is it is more cyclical and subject to the whims of the commodity markets. Thanks for the update. I plan to continue and hold my position with no current plans to add to it. Tom.
Tom from Dividends Diversify recently posted…My Only Regret In Life: Speed To A Million
I agree with you. I like the business but it is very cyclical. It is tempting to add here but I think I am going to be patient and see what the future holds. Thanks for stopping by Tom.
Loved seeing that increase from ADM. January was a huge month for dividend increases as I was expecting 3-4 and got 8, actually at least 10 if you count the smaller holdings in my secondary accounts. But 8 in my main FI Portfolio.
JC recently posted…Let’s Get This Party Started | Dividend Update – January 2018
That is awesome JC. To only be expecting 3 or 4 but to get 10 is really awesome. Those dividend increases always remind me that my investing strategy is paying off. Thanks for stopping by!