The Board of
The Andersons, Inc.
) has approved a three-for-two stock split of its common
stock. This is the first stock split of Andersons since the
financial crisis of 2008.
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The move involves altering the number of shares outstanding and
proportionally adjusting the share price. This makes the shares
appear more reasonably priced, though the underlying value of the
company remains constant.
Per the stock split, for every two stocks owned by a shareholder
an additional share will be given in the form of a dividend,
which will be paid on Feb 18, 2014 to stockholders of record as
of Jan 21, 2014.
As of Sep 30, 2013, Andersons had 18.8 million shares
outstanding. Post the stock split, the number of shares will
escalate 50% to 28.2 million. Andersons' stocks have surged
almost 103% so far this year. The stock is currently trading at
all-time high levels.
In addition, Andersons announced a quarterly cash dividend of
16.5 cents a share, half cent above the prior dividend of 16
cents. The increased dividend will be paid on Jan 13, 2014, to
shareholders of record as of Jan 2, 2014.
These actions reflect the company's outstanding performance. It
will also enhance the liquidity of Andersons' shares. However, a
higher share count is expected to be a drag on earnings per share
in the coming quarters.
Andersons, which belongs to the agricultural products industry
Archer Daniels Midland Company
), reported third-quarter 2013 earnings of 91 cents per share, up
1% year over year. Revenues also climbed 4% year over year to
Andersons expects to benefit from the current record levels of
corn crop being harvested. The Rail Group is also likely to
continue its robust performance based on efficiently managed
railcar portfolio. Even though margins improved in the ethanol
business, the company is concerned that the ethanol market will
Maumee, Ohio-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
selling latest home hardware products.
Andersons carries a Zacks Rank #1 (Strong Buy).
Other favorably ranked stocks in the same industry are
Hormel Foods Corporation
). Both hold a Zacks Rank #2 (Buy).