Calgary — Agrium Inc. said Jan. 22 that it has increased its target dividend payout ratio to 40 percent to 50 percent of free cash flow (net of sustaining capital), which is an increase from the previous target of 25 percent to 35 percent. Agrium also noted the acceptance by the Toronto Stock Exchange of Agrium’s Notice of Intention to Make a Normal Course Issuer Bid. Agrium proposes to purchase through the facilities of the TSX, the New York Stock Exchange, and/or alternative Canadian trading platforms, from time to time over the next 12 months, if considered advisable, up to 7,185,866 common shares, being 5 percent of Agrium’s 143,717,326 issued and outstanding shares as of Jan. 19, 2015. "Increasing our dividend target payout ratio and putting the Bid in place are in alignment with our company strategy and the strength and diversity of our earnings base," said Chuck Magro, Agrium’s president and CEO. "We expect our free cash flow generation to increase significantly as we complete our major production capacity expansion projects for nitrogen and potash this year. We believe that the higher payout ratio strikes a balance between returning significant capital to shareholders, while maintaining our core assets and flexibility for growth. The Bid provides an additional avenue to return capital to shareholders, while we also intend to increase our dividend in step with the growth in free cash flow."
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