27 Dec

International Flavors & Fragrances Is Set to Pay a Q4 Dividend

WRITTEN BY Peter Neil

IFF to pay fourth-quarter dividend

In a press release on December 12, International Flavors & Fragrances (IFF) announced the rates and key dates for its fourth-quarter dividend.

To be eligible for IFF’s fourth-quarter dividend, investors must hold shares in the company as of the close of market on December 28. The dividend is expected to be paid on January 17, 2019.

International Flavors & Fragrances Is Set to Pay a Q4 Dividend

IFF has declared a dividend of $0.73 per share—no change from the previous quarter. However, the dividend represents an increase of 5.8% over the corresponding quarter of the previous year. IFF’s peers Sensient Technologies (SXT), the Clorox Company (CLX), and Estée Lauder (EL) have paid fourth-quarter dividends of $0.36, $0.96, and $0.43, respectively.

At the end of the third quarter, IFF had 81.6 million outstanding shares. However, given the company’s issuance of new shares to facilitate its acquisition of Frutarom, analysts expect its outstanding shares to total ~112 million by the end of the fourth quarter. With IFF suspending its share repurchases temporarily, it will be spending ~$81.76 million on dividend payments.

Dividend growth trend

Since 2013, IFF’s dividend has grown at a compound annual growth rate of 14.23%, one of the best in the industry. To know whether IFF can support this dividend growth, we’ll have to look to its free cash flow trends.

In the next article, we’ll consider IFF’s free cash flow growth and its ability to support its dividend growth. Investors can get indirect exposure to IFF through the iShares US Basic Materials ETF (IYM), which had 2.4% of its holdings invested in IFF as of December 24.

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