DowDupont cuts dividend by 17.4%

DowDuPont (DWDP) will pay pay a fourth quarter dividend of 38 cents per share, marking the first cash dividend since the merger between DuPont and Dow Chemical was closed.

Former Dupont shareholders will receive more dividend, while former Dow Chemical shareholders will receive a lower quarterly payout. However, this is compensated by DowDuPont with a fifth payment in 2017.

“Rewarding our owners over both the near- and long-term has been a top priority for both legacy companies, and it remains so for DowDuPont,” said Andrew Liveris, executive chairman of DowDuPont. “The Board considered many factors in making these decisions, following an approach that delivers benefits to both heritage Dow and DuPont shareholders.”

“We’re committed to returning cash to shareholders consistent with the heritage of both Dow and DuPont, and to preserving the financial flexibility to achieve the target capital structures to support the strong independent companies we intend to create,” said Ed Breen, chief executive officer of DowDuPont.

DowDuPont states that the fourth quarter dividend of 38 cents per share is consistent with the targeted historic dividend payout ratios of each heritage company and is equivalent to the weighted average quarterly dividend of both heritage companies, based on the most recent pre-closing dividends. With a dividend payable date in December 2017, heritage Dow shareholders will receive a total of five dividend payments in the calendar year, in aggregate representing a 21 percent increase in dividends paid in 2017 versus 2016. For heritage DuPont shareholders, this dividend will effectively represent a 28 percent increase over the last DuPont quarterly dividend payment.
Dow and DuPont had paid shareholders cash dividends every quarter since 1912 and 1904, respectively prior to merger close.

The 'old' Dupont had already cut its dividend by 22 percent in 2015. The dividend yield for DowDupont is 2.2%.

DowDuPont is a holding company comprised of The Dow Chemical Company and DuPont. The company operates in the agriculture, materials science and specialty products sectors. The Agriculture Division offers a complete portfolio of products and technologies, traits and crop protection. The Materials Science Division provides solutions, such as packaging, transportation, infrastructure and customer care. The Specialty Products division provides solution for industrial, safety, energy, food, nutrition, construction, electronics and consumer goods industries.

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