Albemarle’s 2Q17 dividend
Albemarle (ALB) is all set to pay investors the 2Q17 dividend. On May 11, 2017, the company announced that the quarterly dividend is $0.32 per outstanding share. It expects to pay it on July 3, 2017, to shareholders of record on June 15, 2017. ALB’s peers FMC (FMC) and W.R. Grace (GRA) have announced quarterly dividends of ~$0.17 and $0.21 per share, respectively. Sociedad Química y Minera de Chile (SQM) announced its 2017 annual dividend of $0.39 per share.
Albemarle’s 2Q17 dividend of $0.32 per share represents an increase of 4.9% over the previous year’s dividend. From 2012 to 2016, ALB’s dividend has grown at a CAGR (compound annual growth rate) of 11.1%.
How Albemarle’s free cash flow is supporting dividend growth
Dividends are usually paid out of free cash flow. So it’s important to know if a company is generating enough free cash flow to sustain its dividend growth. For our analysis, we’ll consider Albemarle’s free cash flow and convert it into free cash flow per share.
Since 2012, Albemarle’s free cash flow per share has been mixed. It rose from $2.30 in 2012 to $4.82 in 2014. However, since 2015, it has fallen, primarily due to acquisitions and divestitures. With the declining trend in free cash flow per share, it would be difficult to sustain ALB’s dividend growth in the long term.
You can indirectly hold Albemarle by investing in the PowerShares DWA Basic Materials Momentum ETF (PYZ), which has invested 3.5% in Albemarle as of June 8, 2017.
In the next part, we’ll take a look at Albemarle’s current dividend yield and dividend payout.