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Agrium Inc. Announces Dividend Increase (AGU)

Agrium Inc. (USA) (NYSE:AGU) released it quarterly results today and with that announced an increase in its quarterly dividends by 12%. The quarterly dividend rises from US$0.78 to US$0.875. Agrium, even though a Canadian company, pays its dividends in US$ and for holders of the TSX listed stock, the dividend amount is converted on record date. All numbers following are in US$. This is the sixth consecutive year of dividend increase from Agrium and came as a bit of a surprise to me as the last increase was in Nov 2014 – with a 4% increase. The new dividend amount will be paid on Jul 16, 2015 to shareholders of record on Jun 30, 2015.


From the earnings release statement:

  • First quarter adjusted net earnings of $19-million or $0.12 per share (see page 2 for adjusted net earnings reconciliation)
  • Strong nitrogen performance contributed to Wholesale gross profit of $234-million compared to $171-million in Q1 2014
  • Retail gross profit of $371-million compared to $387-million in Q1 2014, impacted by slow start to U.S. spring season, shifts earnings into Q2
  • Announced a 12 percent increase to dividend, now $3.50 per share on an annualized basis
  • Repurchased $75-million or approximately 712,000 shares since the beginning of April
  • First half guidance range of $4.75 to $5.25 diluted earnings per share and updated 2015 annual guidance range narrowed to $7.00 to $8.25 diluted earnings per share

“Agrium’s first quarter results were impacted by a late start to the spring season in the U.S. this year. All indications are that Agrium will deliver strong second quarter results on solid crop input demand now that the spring application season is fully underway and given we have made excellent progress ramping up production from our expanded potash facility over the past month. We continue to position our operations and asset mix to support higher cash flow and capital returns over time irrespective of any short term headwinds. The increase in the dividend and recent share buy-back activity demonstrates our commitment to this strategy and to our shareholders,” commented Chuck Magro, Agrium’s President and CEO.

The annual dividend rises from $3.12 per share to $3.50 per share. My portfolio consists of 20 shares of Agrium, increasing my dividends from $62.40 to $70, an increase of $7.50.

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