Premium meat products company Sanderson Farms, Inc. SAFM recently announced that its board of directors has approved an increase of 2 cents per share in its quarterly dividend rate and has also agreed to pay a special cash dividend of $1.00 per share to its shareholders. The company’s share price gained roughly 0.9% at the close of the trading session on Sep 22.
Sanderson Farms’ revised quarterly dividend rate now comes to 24 cents per share, up from the previous rate of 22 cents, while the annualized dividend rate amounted to 96 cents, up 8 cents from the prior payout.
Sanderson Farms will be paying both the quarterly dividend and the special dividend on Oct 18, 2016 to its shareholders of record as of Oct 4.
We believe Sanderson Farms has a policy of rewarding its shareholders handsomely through dividend payments, as evident from its distribution of approximately $9.9 million in the nine months ended Jul 31, 2016. The company’s shareholder-friendly capital allocation strategy indicates a healthy cash position and a strong balance sheet. In the first three quarters of fiscal 2016, Sanderson Farms generated cash of $191.1 million from its operating activities, and had cash and cash equivalents of $243 million exiting the period.
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. The company, with a market capitalization of $2.2 billion, currently sports a Zacks Rank #1 (Strong Buy).
In Aug 2016, Sanderson Farms reported better-than-expected bottom-line results for third-quarter fiscal 2016, reflecting a positive earnings surprise of 8.52%. Over the last 30 days, the Zacks Consensus Estimate for Sanderson Farms has increased 10.8% to $7.18 per share for fiscal 2016 and 59.1% to $6.35 per share for fiscal 2017.
Other Stocks to Consider
Other favorably placed stocks in the food industry include Tyson Foods, Inc. TSN, Omega Protein Corporation OME and Ingredion Incorporated INGR.
Tyson Foods has seen upward estimate revisions over the past 60 days. The stock sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Omega Protein, a Zacks Rank #1 stock, has also witnessed upward estimate revisions over the past 60 days.
Ingredion Incorporated carries a Zacks Rank #2 (Buy). The company has seen solid estimate revisions over the last 60 days.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Zacks Investment Research