Sanderson Farms, Inc. (SAFM) recently announced a 10% increase in its quarterly dividend rate. This news, coupled with a special dividend payment, lifted the company’s share price up by 3.1%. The stock closed the trading session at $91.78 on Sep 18.
The revised quarterly dividend, as approved by Sanderson Farms’ board of directors, stands at 22 cents, up from 20 cents paid previously. On an annualized basis, the dividend rate has increased to 88 cents from the earlier 80 cents per share. In addition, there will be a special dividend payment of 50 cents per share.
Sanderson Farms will pay the twin dividends on Oct 14, 2014 to shareholders of record on Sep 30.
Sanderson Farms follows a consistent policy of rewarding its shareholders handsomely through dividend payments, having distributed approximately $9.2 million in the nine months ended Jul 31, 2014. The company’s shareholder-friendly capital allocation strategy indicates a healthy cash position. In the first three quarters of fiscal 2014, the company generated cash of $197.3 million from its operating activities, while its cash and cash equivalents totaled $139.3 million at the end of the third quarter.
The Zacks Consensus Estimate for Sanderson Farms is pegged at $10.36 for fiscal 2014 and $9.17 for fiscal 2015, representing year-over-year growth of 82.3% and decline of 11.5% respectively.
Sanderson Farms is an integrated poultry-processing company, engaged in the production, processing, marketing and distribution of fresh and frozen chicken products in the U.S. With a market capitalization of $2.1 billion, the company currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the industry include Pilgrim's Pride Corporation (PPC), Amira Nature Foods Ltd. (ANFI) and Hormel Foods Corporation (HRL). While Pilgrim's Pride and Amira Nature Foods sport a Zacks Rank #1 (Strong Buy), Hormel Foods holds a Zacks Rank #2 (Buy).
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