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Is Albemarle’s Dividend Yield Better Than Its Peers?

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Albemarle’s latest dividend

On November 3, 2016, Albemarle (ALB) announced a fourth-quarter dividend of ~$0.31 per share. The dividend will be paid on January 2, 2017, with a record date of December 15, 2016.

In the first nine months of 2016, Albemarle has paid a dividend of $101.1 million, which represents a dividend payout ratio of approximately 25.9%. It’s very important that companies strike a balance between how much dividend should be paid to shareholders and how much earnings they should retain for future growth.

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Dividend growth and dividend yield

Albemarle has raised its dividend per share for 11 consecutive years on a year-over-year basis. In 2005, Albemarle paid a dividend of $0.31 per share, and in 2016, it will pay a dividend of $1.22 per common stock. That implies a CAGR (compound annual growth rate) of 13.2% since 2005.

Taking into account the fourth-quarter dividend, Albemarle’s dividend yield as of December 14, 2016, is ~1.4%. Albemarle’s dividend yield is better than its peers. Assuming that the fourth-quarter dividends for Albemarle’s peers will be similar to the 3Q16 dividends, FMC’s (FMC) dividend yield is ~1.2%, and the dividend yield for W.R. Grace (GRA) is 1.0%. Chemtura (CHMT) doesn’t have any dividend yield since it hasn’t paid any dividends in 2016.

If you’re looking for exposure to Albemarle through ETFs, you can invest in the Guggenheim S&P 500 Equal Weight Materials ETF (RTM). RTM has invested 4.2% of its portfolio in Albemarle as of December 14, 2016.

In the next part, we’ll look at Albemarle’s latest analyst recommendations.

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