The Board of The Andersons, Inc. (ANDE) has approved a three-for-two stock split of its common stock. This is the first stock split of Andersons since the financial crisis of 2008.
The move involves altering the number of shares outstanding and proportionally adjusting the share price. This makes the shares appear more reasonably priced, though the underlying value of the company remains constant.
Per the stock split, for every two stocks owned by a shareholder an additional share will be given in the form of a dividend, which will be paid on Feb 18, 2014 to stockholders of record as of Jan 21, 2014.
As of Sep 30, 2013, Andersons had 18.8 million shares outstanding. Post the stock split, the number of shares will escalate 50% to 28.2 million. Andersons’ stocks have surged almost 103% so far this year. The stock is currently trading at all-time high levels.
In addition, Andersons announced a quarterly cash dividend of 16.5 cents a share, half cent above the prior dividend of 16 cents. The increased dividend will be paid on Jan 13, 2014, to shareholders of record as of Jan 2, 2014.
These actions reflect the company’s outstanding performance. It will also enhance the liquidity of Andersons’ shares. However, a higher share count is expected to be a drag on earnings per share in the coming quarters.
Andersons, which belongs to the agricultural products industry along with Archer Daniels Midland Company (ADM), reported third-quarter 2013 earnings of 91 cents per share, up 1% year over year. Revenues also climbed 4% year over year to $1.18 billion.
Andersons expects to benefit from the current record levels of corn crop being harvested. The Rail Group is also likely to continue its robust performance based on efficiently managed railcar portfolio. Even though margins improved in the ethanol business, the company is concerned that the ethanol market will remain volatile.
Maumee, Ohio-based Andersons is a diversified company operating in six different business segments ranging from buying, selling and storing grain to leasing railcars and running retail stores selling latest home hardware products.
Andersons carries a Zacks Rank #1 (Strong Buy).
Other favorably ranked stocks in the same industry are Cosan Ltd. (CZZ) and Hormel Foods Corporation (HRL). Both hold a Zacks Rank #2 (Buy).
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