Andersons Hikes Quarterly Dividend by 27.3%, Shares Up - Analyst Blog

Shares of The Andersons, Inc. (ANDE) rose about 2.6% and closed at $52.39 yesterday after its Board approved a 27.3% increase in regular quarterly dividend to 14 cents per share from 11 cents. This is the 73rd consecutive hike in the company's dividend.

Annualized, this represents a payout of $1.68 per share, up from the current annual dividend of $1.32 per share. The new dividend will be paid on Jan 23, 2014, to shareholders of record on Jan 2, 2015.

A regular disbursement of dividends with occasional hikes has been a common phenomenon for Andersons. This reflects the company's manner of rewarding shareholders over time and points at its healthy balance sheet and strong cash position.

In the third-quarter 2014, however, Andersons however reported a 3% decline in earnings to 59 cents per share. The company ended the third quarter with cash and cash equivalents of $327 million, up substantially from $309 million as of 2013-end. Andersons paid dividend of over $9 million in the first nine months, ended Sep 30, 2014, a 4% rise from the year-ago period.

In addition, Andersons' board of directors has authorized the repurchase of up to an aggregate $50 million of the company's common stock. This is to offset dilution related to the company's recent share issuance in connection with its acquisition of Auburn Bean and Grain. The program will also enable the company to acquire shares used for its employee long-term incentive plans in order to offset dilution.

Andersons continue to focus on growing its business through acquisitions in existing and new geographies and enhancing new risk management and grain marketing services. Reaching into new regions and increasing storage capacity will enhance the company's ability to provide relevant-added services to customers.

Moreover, Andersons will continue to benefit from the strong momentum in the Ethanol group.  It has hedged approximately 85% of the fourth quarter and almost half of the January ethanol margin risks.

Maumee, OH-based Andersons is a diversified company operating in six different business segments ranging from buying, selling and storing grain to leasing railcars and running retail stores catering to the latest home hardware needs.

Andersons carries a Zacks Rank #4 (Sell). However, some better-ranked stocks in the same industry are Alcoa Inc. (AA), Banro Corporation (BAA) and Celanese Corporation (CE). All these stocks hold a Zacks Rank #2 (Buy).