Pioneer Investments (Trades, Portfolio) is a global investment management firm with presence in 28 countries worldwide. Last quarter, Pioneer Investment initiated a position in Agrium (AGU) buying 25,967 shares. Agrium is a retailer of agricultural products and services in the United States, Canada, Australia, Argentina, Brazil, Chile and Uruguay, as well as a multi-national producer and wholesale marketer of nutrients for agricultural and industrial markets. Agrium’s strategy is to invest and operate across the agricultural inputs value chain (fertilizer, crop protection and seed), through production, distribution and retail sales. This integrated strategy allows the company to generate both strategic and operational synergies.
In February, Agrium raised its target dividend pay out ratio to 40%-50% of free cash flow and earlier this month it announced a 12 percent increase in its dividend (now $3.50 on an annualized basis). The company also plans to buy back up to 5% of its common shares over the next 12 months. According to the company’s CEO, Chuck Magro, the company expects its free cash flow generation to increase significantly as it complete its major production capacity expansion projects for nitrogen and potash this year. According to him, the higher payout ratio strikes a balance between returning significant capital to shareholders, while maintaining Agrium’s core assets and flexibility for growth. Continue Reading »