Potato products supplier Lamb Weston Holdings Inc. (LW) will raise its quarterly dividend by 4.3 percent to 24.5 cents per share in 2021. This follows a dividend hike of 2.2 percent to 23.5 cents per share in 2020. This marks the 5th year of dividend increases by Lamb Weston, a member of the S&P500-index.
The Board of Directors of LW declared a quarterly dividend of $0.245 per share of Lamb Weston common stock, a 4-cent annualized increase. The dividend is payable on March 4, 2022, to stockholders of record as of the close of business on Feb. 4, 2022. A new annualized dividend rate of 98 cents per share yields 1.2% at a stock price of $79.
Lamb Weston also authorized to repurchase up to an additional $250 million of its common stock. This is an increase to the initial repurchase program, first approved in December 2018. The program has no expiration date.
Two years ago Lamb Weston stated that it will continue to target an annual dividend payout ratio of 25 percent to 35 percent of adjusted diluted earnings per share. The company now pays an estimated annual dividend of $143 million to its shareholders if this last dividend hike is included.
Lamb Weston is a supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers worldwide. The company is the number one supplier of value-added frozen potato products in North America and a leading supplier of value-added frozen potato products internationally with French fries representing the majority the product portfolio. Lamb Weston has four reportable segments: Global, Foodservice, Retail, and Other. Lamb Weston became an independent publicly traded company in 2016 when the company was separated from Conagra Brands.