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Monday, February 14, 2011

Potash Doubles Dividend and Announces Stock Split

Potash Corporation of Saskatchewan Inc. (POT) announced today that the company is offering a 3-for-1 stock split and increasing their quarterly dividend by 110%.

If final regulatory approval is received, Potash shareholders will receive 2 additional shares for each share they own as of February 16, 2011. Potash shares are expected to begin trading on a split basis on February 14, 2011 on the Toronto Stock Exchange and February 25, 2011 on the New York Stock Exchange.

The fertilizer stock is also more than doubling their dividend which will lift their current yield to 0.5% based on yesterday’s closing price.

Potash President and Chief Executive Officer Bill Doyle commented in a statement. “Our shareholders have provided the important capital that has helped prepare our company for the next stage of growth. The doubling of our dividend reflects the confidence we have in the long-term drivers of our business and further commitment to using our strong cash flow to create value for our shareholders. Additionally, the increased number of shares resulting from the split should enhance trading liquidity in our stock.”

Potash shares have been on a roll since receiving an unsolicited takeover bid from BHP Billiton (BHP) last summer. The $39 billion deal unraveled when BHP failed to gain regulatory approval for the deal. Maybe BHP should follow Potash’s lead and focus on dividends and not acquisitions to increase shareholder value.

The dividend will be paid out on a post-split basis of $.07 per share on May 5, 2011 to shareholders of record as of April 14, 2011.

 Disclosure NONE

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