DowDuPont’s key first-quarter dates
In a press release on February 14, DowDuPont (DWDP) announced its regular quarterly dividend for the first quarter. DowDuPont also announced the key dates for the dividend. Investors who hold DowDuPont shares as of the close on February 28 in the company’s record are eligible for the dividend. DowDuPont is expected to pay the dividend on March 15.
DowDuPont will be paying the sixth dividend since Dow Chemicals and DuPont merged. For the first quarter, DowDuPont has announced a dividend rate of $0.38 per share, which indicates that there isn’t a change in the dividend rate compared to the previous quarter or the previous year. Eastman Chemical (EMN), LyondellBasell (LYB), and Celanese (CE) have declared a first-quarter dividend of $0.62, $1.0, and $0.54. At the end of the fourth quarter, DowDuPont had 2.29 billion outstanding shares. If DowDuPont doesn’t buy back any shares before the key dates, then the company will be spending $2.29 billion to pay its dividend.
Free cash flow
Usually, dividends are paid out of the free cash flow that the company generates. Investors should know the status of DowDuPont’s free cash flow. In 2018, the company’s free cash flow was $868 million. DowDuPont has spent $3.49 billion towards dividend payments in 2018. The company’s free cash flow isn’t strong enough to support the dividend payment in the long run.
Investors could hold DowDuPont indirectly by investing in the iShares U.S. Basic Materials ETF (IYM). IYM has invested 20.4% of its portfolio in DowDuPont as of February 27.