Recent dividend increase
On May 24, Bunge (BG) announced that its board of directors approved a 10.5% increase in the company’s regular quarterly common share cash dividend from $0.38 to $0.42 per share. The increased dividend will be paid on September 2, 2016, to shareholders of record on August 19, 2016.
Along with this, Bunge also declared a quarterly cash dividend of $1.21875 per share on its 4.9% cumulative convertible perpetual preference shares. This will be paid on September 1, 2016, to shareholders of record on August 15, 2016. In 1Q16, Bunge returned $243 million in cash to shareholders through dividends and share repurchases.
Bunge paid $549 million in total to shareholders through dividends and share repurchases in 2015. The company paid $249 million as dividends in 2015. Bunge has a dividend yield of 2.7% as of July 18, 2016. The company’s management raised the dividend at a CAGR (compound annual growth rate) of 10.3% over the last five years.
The company purchased a total of $600 million in shares in 2014 and 2015. Bunge announced a $500 million share repurchase program in May 2015. In 2016, year-to-date, the company repurchased $200 million in shares. Out of this, $181 million was in the first quarter and $19 million was in the second quarter.
Peers’ dividend yield
- Syngenta’s dividend yield is 3%.
- Ingredion’s dividend yield is 1.4%.
- Archer Daniels Midland’s dividend yield is 2.7%.
The FlexShares Morningstar Global Upstream Natural Resources Index ETF (GUNR) invests 1.3% of its portfolio in Bunge. The PowerShares DWA Consumer Staples Momentum Portfolio (PSL) invests 3.8% of its holdings in Ingredion.