uploads///Ingredions and Peers Dividend Yield

How Has Ingredion Maximized Shareholder Value?


Jul. 22 2016, Updated 1:05 p.m. ET

Enhancing shareholder value

Increasing shareholder value is an important aspect of Ingredion’s (INGR) strategic blueprint. The company earned around $96 million in cash flow from operations. It used around $35 million to pay dividends in the first quarter.

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Ingredion pays a consistent dividend

Ingredion has a dividend yield of 1.3% as of July 15, 2016. The company’s management has raised its dividend at a CAGR (compound annual growth rate) of 29.3% over the last five years.

Shareholders also can expect good returns in fiscal 2016. The company anticipates another year of strong cash flows of $700 million–$750 million. It expects to return a portion of it to shareholders through dividends after allocating ~$300 million to capital investments in 2016 for growth and process improvements. The company targets a dividend payout ratio of 25%–30%, given the expectations for strong cash flows.

Ingredion paid $126 million in cash to shareholders through dividends in 2015. That year, the company gave a total of $1.74 per share to shareholders in the form of dividends. It paid a dividend of $0.45 per share on April 25, 2016, to shareholders of record as of March 31, 2016.

Recent dividend declared

On May 18, 2016, Ingredion’s board of directors declared a quarterly dividend of $0.45 per share on its common stock. This will be paid on July 25, 2016, to shareholders of record as of June 30, 2016. Below are the dividend yields of two of Ingredion’s peers as of July 15, 2016:

  • Archer-Daniels Midland (ADM): 2.7%
  • Bunge (BG): 2.7%

The Vanguard S&P Mid-Cap 400 Value ETF (IVOV) and the iShares S&P Mid-Cap 400 Value ETF (IJJ) invest 0.95% and 0.68%, respectively, in Ingredion.

Now let’s take a look at the valuation multiples of Ingredion and its peers.


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