IBD 50's Ingredion Offers Dividend, Growth Potential
On the surface, it's not that exciting to produce sweeteners, starches and corn oil.
Where it gets exciting is if you're an income investor looking for steadiness and growth potential.
In that case you might get quite excited about that industry and one of its highly rated companies,Ingredion ( INGR ).
Westchester, Ill.-based Ingredion, formerly known as Corn Products International, sports a three-year EPS Stability Factor of 8. That's near the steadiest-possible grade of 0 and far from the wildest-possible grade of 99.
The company -- whose products range from high fructose corn syrup to starches used by a variety of sectors -- pays a quarterly dividend of 26 cents a share. That provides an annualized yield of about 1.6%.
The company boosted its payout in September from 20 cents a share. That was its third dividend increase in 18 months.
Ingredion has a diversified customer base, helping to explain its steadiness. It converts corn into products used by more than 60 industries, as a Dec. 7 article in IBD's New America section noted. You can find the company's ingredients in frozen dinners, beer, cosmetics and IV solutions.
Another positive is that Ingredion has been claiming a spot in recent weeks in the IBD 50, a list of leading growth stocks. The company has increased EPS by 21% and 27% in the last two quarters, though revenue has edged up just 3% in those periods.
Ingredion has said it's targeting EPS growth of 10% to 12% over the long term.
"Earnings performance should be driven by a combination of organic sales growth of 3% to 4%, cost efficiencies and mix improvement," CFO Cheryl K. Beebe said last month in a news release issued in conjunction with the company's analysts day.
In terms of chart action, Ingredion remains in a buying range after topping a 64.18 buy point from a three-weeks-tight structure, a follow-on pattern.
The stock broke out from an early-stage base in September, following it up in October with a rally off its 10-week moving average.