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Bunge Limited Has Declared Dividends

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Price movement

Bunge Limited (BG) has a market cap of $9.2 billion. It fell by 0.41% to close at $65.79 per share on August 10, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 2.1%, 8.8%, and -2.3%, respectively, on the same day.

BG is trading 4.6% above its 20-day moving average, 5.4% above its 50-day moving average, and 7.4% above its 200-day moving average.

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Related ETFs and peers

The iShares Russell Mid-Cap Value ETF (IWS) invests 0.31% of its holdings in Bunge Limited. The ETF tracks an index of US midcap value stocks. The index selects from the bottom 80% of the Russell 1000, screening on value factors. The YTD price movement of IWS was 12.6% on August 10.

The iShares MSCI USA Value Factor ETF (VLUE) invests 0.81% of its holdings in Bunge Limited. The ETF tracks an index of large- and mid-cap US equities. Stocks are selected and weighted using fundamental metrics (earnings, revenue, book value and cash earnings), aiming for exposure to undervalued stocks in each sector.

The market cap of Bunge’s competitors are as follows:

  • BRF SA-ADR (BRFS) — $13.5 billion
  • Archer-Daniels-Midland Company (ADM) — $25.9 billion

Latest news on Bunge Limited

Bunge Limited Finance, a wholly owned finance subsidiary of Bunge Limited, has offered $700 million aggregate principal amount of 3.250% senior notes due 2026. This offering is expected to close on August 15, 2016.

The net proceeds from the offering will be used for general corporate purposes, which includes the repayment of outstanding indebtedness.

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Moody’s rating

Moody’s Investors Service has rated Bunge Limited Finance Corporation’s $700 million issuances of guaranteed senior unsecured notes due 2026 as “Baa2.” Moody’s gave the stock’s rating outlook as stable.

Performance of Bunge in 2Q16

Bunge Limited reported 2Q16 net sales of $10.5 billion, a fall of 2.8% compared to net sales of $10.8 billion in 2Q15. Sales from Agribusiness and Sugar & Bioenergy fell by 2.8% and 8.2%, respectively. Sales from Edible Oil Products and Milling Products rose by 2.3% and 3.2%, respectively, in 2Q16 compared to 2Q15.

The company’s gross profit margin and total segment EBIT (earnings before interest and tax) rose by 1.3% and 22.8%, respectively, in 2Q16 compared to 2Q15.

Its net income and EPS (earnings per share) rose to $109.0 million and $0.78, respectively, in 2Q16 compared to $72.0 million and $0.50, respectively, in 2Q15.

Bunge’s cash and cash equivalents and inventories rose by 33.3% and 33.6%, respectively, in 2Q16 compared to 4Q15. Its current ratio fell to 1.3x, and its debt-to-equity ratio rose to 2.0x in 2Q16 compared to a current ratio and debt-to-equity ratio of 1.5x and 1.7x, respectively, in 4Q15.

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Projections

Bunge has made the following projections for fiscal 2016:

  • EBIT for Food & Ingredients to be $10 million–$30 million higher compared to fiscal 2015
  • EBIT for Fertilizer to be ~$30 million higher compared to fiscal 2015
  • EBIT for Sugar & Bioenergy to increase by $70 million–$80 million

Quarterly dividend

Bunge has declared a regular quarterly cash dividend of $0.42 per share on its common stock. The dividend will be paid on December 2, 2016, to shareholders of record on November 18, 2016.

The company has also declared a quarterly cash dividend of $1.21875 per share on its 4.875% cumulative convertible perpetual preference shares. The dividend will be paid on December 1, 2016, to shareholders of record on November 15, 2016.

In the final part of this series, we’ll look at WhitWave Foods Company (WWAV).

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