By Josh Beckerman
Archer Daniels Midland Co. said it plans to increase its
dividend payout ratio to about 30% to 40% of earnings in the medium
term, compared with a historic range of 20% to 25%.
In December 2013, the company said it was increasing its
quarterly payout to 24 cents from 19 cents.
The expected change to the payout ratio is part of a plan to
"maintain a balanced approach to capital allocation" that will
include the reinvestment of about 30% to 40% of future operating
cash flows in "value-generating capital projects," with the rest
slated for growth initiatives including mergers and acquisitions
and/or return of capital to shareholders.
ADM also said it plans to increase food ingredient sales from
$2.5 billion to $10 billion.
ADM's $3 billion purchase of Wild Flavors earlier this year
moved the company deeper into the business of designing ingredients
for products such as protein drinks and nut bars, which is more
profitable than trading grain and less susceptible to
commodity-price swings. In November, ADM completed a $191 million
deal for Specialty Commodities Inc.
Write to Josh Beckerman at josh.beckerman@wsj.com
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