Agrium: Significant Dividend Growth Expected For This Agricultural Company

Agrium Inc. (NYSE:AGU), an agricultural products and services company, recently caught our eye when the company announced several shareholder friendly initiatives. These included raising its dividend payout ratio to 40-50% of free cash flow from its earlier targeted payout of 25-35%, and plans to repurchase up to 5% (around 7.2 million) of its current outstanding shares over the next 12 months. Both of these actions not only increase shareholder value, but also demonstrate management’s optimism for the company’s future.

Based on the most recent quarterly dividend payment of $0.78, Agrium has an annual dividend payment of $3.12 which translates to a current dividend yield of around 3%. Although the most recent $0.78 dividend payment was just increased from $0.75, that figure represents the payout target of 25-35% and not the newly announced 40-50%. Even assuming the payout ratio moves from the high end of the old (35%) to the low end of the new (40%), investors should be able to expect at minimum an increase of 14% in its quarterly dividend payment. Although that is a solid dividend increase, there is another more powerful dividend growth driver coming in the near future… READ MORE

Forget Yield -- Dividend Growth Is The Metric That Matters For Retirement Income

Income investors had a little scare in May and June. Bond prices took a tumble and dragged down assets that have come to be viewed as bond substitutes—including popular dividend-paying stocks, MLPs and REITs.

Now that the dust has settled and the income markets have regained some semblance of normalcy, let’s take a step back and review the case for income stocks.  With the Fed’s quantitative easing eventually coming to an end and with bond yields likely to rise in the years ahead, does it still make sense to look to the stock market for income?  Or might investors be better off buying and rolling over a bond ladder to meet their income needs? READ MORE

Disclosure: Long O, WMT

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A Potential Dividend Growth Future Star

As a dividend growth investor, one of the primary stats I look at when evaluating a stock is the number of annual dividend increases. The longer a stock has been increasing its dividend payment, the more that becomes part of the corporate identity. Typically, it takes a major event within the company (or industry) to prevent the board of directors from continuing to raise its dividend after a long history has been established. This adds a layer of safety that helps me sleep better at night. I am quite certain that Kimberly-Clark (KMB) - 38 years of increases, Wal-Mart (WMT) - 37 years of increases, and AFLAC (AFL) - 30 years of increases, will provide me with a raise once again this year. Companies like these should be at the core of any dividend growth portfolio.  READ MORE

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