Albemarle’s Q3 2018 dividend
Albemarle (ALB) has announced the key dates for its Q3 2018 dividend. To be eligible for the dividend, investors must be shareholders of record as of September 14. The dividend is expected to be paid on October 1.
ALB has announced a dividend of $0.335 per share, an increase of 4.7% year-over-year but unchanged sequentially. ALB’s peers FMC (FMC) and W.R. Grace (GRA) will pay quarterly dividends of $0.165 and $0.24 per share, respectively. Sociedad Química y Minera de Chile (SQM) is expected to pay a dividend of ~$0.50 in Q3 2018. Since 2012, ALB’s dividend has grown at a CAGR (compound annual growth rate) of 9%, which is good growth. But investors want to know if ALB’s free cash flow can support its dividend growth.
Free cash flow
In the past six years, ALB has been generating positive free cash flow with the exception of 2017. Excluding that, its average free cash flow has remained at ~$307 million. At the same time, on average, ALB has used ~40% of its free cash flow to pay dividends. That indicates that ALB’s free cash flow has been strong enough to support its dividend growth and leave enough free cash flow for other things such as share buybacks, repayment of debt, and other financing activities.
Investors can indirectly hold Albemarle by investing in the First Trust NASDAQ Clean Edge Green Energy Index ETF (QCLN), which has invested 8.4% of its portfolio in Albemarle as of August 30.