Handsome yields for Fonterra faithful
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Fonterra supply shares (FCG) and the Shareholders’ Fund units (FSF) are among the highest yielding stocks in the 2024 company reporting period.
The total dividend in FY24 is 55c, made up of 15c interim paid last April, 25c final dividend and 15c special dividend, both to be paid on October 11.
The prices of both farmer-only shares and the FSF units rose 10-12c on the news of the dividends and the strong results for the financial year ended July 31.
FSF units are now trading at $4.65, having been as low as $3 last December.
FCG co-operative shares have risen to $3.60, compared with $2 late last year.
On current market prices, the full-year dividend of 55c gives a gross yield of 15% to farmers and 12% to investors,
The yields are on top of the distribution of $1 from FY23, being 50c dividend and 50c capital return.
The market capitalisation of both shares and units has risen over $6.3 billion and fully shared-up farmers will have over $500,000 in share value in their balance sheets, based on the average milk production of 150,000kg annually.
Share prices are still increasing because Fonterra has a begun a divestment process for its consumer businesses and may make further capital returns.
Farmers and investors have been well rewarded since share and unit prices hit bottom after the financial losses of 2019 and the capital restructuring that followed.
