International Flavors and Fragrances declares quarterly dividend
International Flavors and Fragrances (IFF) will pay a quarterly dividend of $0.69 per share. This dividend could be the last dividend for fiscal 2017 if IFF follows the same dividend payment schedule it followed in fiscal 2016. The dividend will be paid on October 6, 2017. Investors will be eligible to get the dividend if they hold the stock on or before the record date of September 25, 2017.
IFF’s dividend declaration of $0.69 per share represents a dividend increase of 8.0% over its previous dividend of $0.64 per share. With the assumption that this will be the final dividend for fiscal 2017, IFF’s dividend since 2012 has grown at a CAGR (compound annual growth rate) of 9.2%.
Free cash flows
To finance the dividend activity, free cash flows are very critical. Companies can use positive free cash flows to pay dividends, repay debts, and expand its business. To check if IFF’s dividend growth can be supported by IFF’s free cash flow, we’ll convert IFF’s free cash flow into free-cash-flow per share.
In the past five years, IFF’s free cash flow per share has been on an increasing trend, growing at a CAGR of 20.5%. However, at the end of 2Q17, IFF’s free cash flow per share stood at just $0.15 per share. Excluding 2017 so far, IFF’s free cash flow per share growth has been outperforming dividend growth, indicating that IFF can efficiently manage its dividend growth.
Investors looking to hold IFF indirectly can invest in the PowerShares DWA Basic Materials Momentum Portfolio (PYZ), which invests 2.5% of its holdings in IFF. The fund’s other holdings include Chemours (CC), FMC (FMC), and Albemarle (ALB), which have weights of 4.8%, 4.7%, and 3.7%, respectively, as of August 17, 2017.
In the next part, we’ll look into how IFF’s dividend yield is shaping up and also analyze IFF’s dividend payout ratio.