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FMC Hikes Dividend, Declares New Share Repurchase Program

FMC Corporation FMC hiked quarterly dividends more than two-fold to 40 cents per share from 16.50 cents. The revised dividend is payable on Jan 17, 2019, to shareholders of record at the close of business as of Dec 28, 2018. Also, the company’s board authorized a new share repurchase program worth $1 billion, which is expected to be complete by mid-2020.

The company stated that is entering a phase of lower capital intensity and higher cash generation. Going forward, it intends to increase the dividend at least at the same rate of net income growth.
The latest dividend hike and share repurchase authorization are part of FMC’s capital allocation plan.  Per the plan, the company looks to return up to $4.5 billion to shareholders in the next five years.    

Notably, FMC exited the third quarter with cash and cash equivalents of $176.5 million, up 88% rise year over year. The company, last month, also declared a separate $200-million share repurchase program under the existing share buyback authorization, which is likely to be completed this week.     

Shares of the company have inched up 0.3% in the past three months, against the industry’s decline of roughly 13.5%.

For 2018, FMC backed its adjusted earnings per share (EPS) guidance of $6.05 at the midpoint of its previously announced range. The projection excludes the impact of Livent standalone costs and non-controlling interest. Including the Livent impacts, it expects adjusted EPS in the range of $5.93-$6.03 per share, up 121% at the midpoint on a year-over-year basis. Notably, the company plans to spin off roughly 85% stake in Livent to shareholders of FMC on Mar 1, 2019, in the form of a pro-rata distribution of Livent shares.

For fourth-quarter 2018, the company expects adjusted EPS in the range of $1.33-$1.43 per share.

FMC Corporation Price and Consensus


FMC Corporation Price and Consensus | FMC Corporation Quote


Zacks Rank & Stocks to Consider

FMC currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space include CF Industries Holdings, Inc CF and The Mosaic Company MOS, sporting a Zacks Rank #1 (Strong Buy) along with Air Products and Chemicals, Inc APD, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected long-term earnings growth rate of 6%. The company’s shares have gained 17.4% in the past year.

Air Products has an expected long-term earnings growth rate of 11.8%. Its shares have moved up 2.9% in a year’s time.

Mosaic has an expected long-term earnings growth rate of 7%. The company’s shares have surged 54.6% in the past year.

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