Missing drama? This "moody" company regularly changes its dividend, currently paying 4.1%
Shares at five dollars pay 4.1% a year, but no amount is promised: the company distributes exactly half of its profit each quarter. This year it is inflated by a war that is also eroding it. How can you know what check will come next?
Key points
Shares at five dollars yield 4.1%, but none of the future payouts are promised in advance.
Three years ago the same company at today's price yielded 18%, last year five times less.
The war in the Middle East plays two roles in its results at once, each pulling in the opposite direction.
The market pushed it to a one-year low because of one sentence by the US president about Belarus.
The Bulios model calculates fair value at half of today's price and has one specific reason for it.
A dividend that is recalculated for you every three months
At first glance, a boring table item: shares at $5.02, dividend yield 4.1%, about $0.21 per share over the last twelve months. But for ICL Group $ICL that yield does not mean what it does for most dividend stocks. It is not a fixed amount that management raises by a few percent each year. It is a ratio: the company distributes up to 50% of adjusted net profit to shareholders every quarter, whatever it is.
Imagine the difference between rent from an apartment and a share of the revenue of a shop on the ground floor. The rent stays the same until the tenant goes bankrupt. The share of revenue fluctuates every month depending on how many people come to shop. ICL pays the latter.
The payout history shows it without embellishment. In 2022, when fertilizer prices spiked after the Russian invasion of Ukraine, the company paid about $0.905 per share for the year – at today's price that would be an 18% yield. In 2023 only $0.37, in 2024 $0.195, and last year $0.174. Same stock, same policy, five times smaller check. This year three consecutive payments came, each higher than the previous: $0.0465, $0.0535, and most recently $0.0581.
So that 4.1% is not a promise. It is a thermometer that shows how the company has done over the last four quarters. Investors are left to estimate which way it will go next. There are a few signals that can give a hint.