Potash Corp. of Sakatchewan Inc. (POT) has announced a 25% hike in its quarterly cash dividend from 28 cents per share to 35 cents per share. The dividend will be paid on Aug 2, 2013, to shareholders of record on Jul 12, 2013. This represents the company’s fifth dividend hike since 2011.
Potash Corp. has increased its dividend based on its confidence to generate strong cash flow in the coming years and remains committed to escalating returns for its shareholders.
Potash Corp., which is among the prominent players in the fertilizer industry along with CF Industries Holdings, Inc. (CF), Agrium Inc. (AGU) and The Mosaic Company (MOS), released its first-quarter 2013 results in April. The company’s earnings of 63 cents per share in the first quarter exceeded the Zacks Consensus Estimate of 61 cents, reflecting a positive surprise of around 3.3%. The company posted a profit of $556 million in the reported quarter, up roughly 13% % from $491 million (56 cents a share) recorded a year ago.
Sales came in at $2,100 million in the quarter, up 20.3% from $1,746 million registered a year ago, and ahead of the Zacks Consensus Estimate of $1,923 million. The year-over-year increase was due to improved global potash demand and record first-quarter nitrogen contributions.
Potash Corp. expects earnings for the second quarter and full-year 2013 in the range of 70 cents to 85 cents per share and $2.75 to $3.25 per share, respectively.
While Potash Corp. may gain from a recovery in fertilizer demand in 2013, it contends with macroeconomic uncertainties and a challenging demand scenario in India. The company is also exposed to volatility in potash and phosphate pricing.
Potash Corp. currently retains a Zacks Rank #3 (Hold).
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