Where does Ingredion Inc. rank after its 11% announced dividend increase?

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Ingredion Incorporated is a leading global ingredients solutions company. Ingredion makes sweeteners, starches, nutrition ingredients and biomaterials that are used by customers in everyday products from foods and beverages to paper and pharmaceuticals.

Ingredion uses innovative ingredient solutions help customers stay on trend with simple ingredients and gluten-free or high-fiber foods .

Ingredion announced a regular quarterly dividend of $0.50, an 11 percent increase from the prior rate of $0.45 per share. The dividend will be paid at the new higher rate on October 25, 2016, to shareholders of record at close of business on October 3, 2016.

Listed in the table below are the quarterly dividend payments since 2010. Our analysis of Ingredion as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
10/3/2016 0.5
6/28/2016 0.45
3/29/2016 0.45
12/29/2015 0.45
9/28/2015 0.45
6/26/2015 0.42
3/27/2015 0.42
12/29/2014 0.42
9/26/2014 0.42
6/26/2014 0.42
3/27/2014 0.42
12/27/2013 0.42
9/26/2013 0.38
6/27/2013 0.38
3/27/2013 0.38
12/27/2012 0.26
10/1/2012 0.26
6/28/2012 0.2
3/29/2012 0.2
12/28/2011 0.2
9/29/2011 0.16
6/28/2011 0.16
3/29/2011 0.14
12/29/2010 0.14
9/28/2010 0.14
6/28/2010 0.14
3/29/2010 0.14

Analysis of Ingredion is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 1.38 193
Dividend Growth (5 year VL) 24% 31
Trailing P/E 20.9 150
S&P Financial Rating B++ 160
Beta 1.0 125
Total Ranking #160 659

Additional Information;

Price 9/22/16 % Yield 5 Year Div. Growth Rate  SPS    2016 P/S Ratio 10 yr P/S Low 10 yr P/S  High 5 yr max Yield % 5 yr lowest Yield %
$131.26 1.38% 24% 79.05 1.66 0.33 1.69 2.52% 1.14%

Final Analysis;

  • Ingredion’s dividend yield is on average with than that of the S&P 500 Index and is also trading towards the lower end of its average historical dividend yield.
  • Ingredion maintains a 5 year dividend growth rate of 24%   This is lower than 8 other companies in the sector and ranks 31 among all companies.
  • Ingredion has paid out a dividend consecutively for the past 18 years.
  • Ingredion is trading at the top of its average price/sales (P/S) range at 1.66.  From a relative valuation perspective, Ingredion is overvalued based upon its historical trading history.
  • Ingredion maintains a credit rating of B++. This is below investment grade, a negative.
  • Ingredion maintains a beta of 1.00, on average with the market average.
  • Ingredion’s total ranking is 160.

Based upon its high P/S ratio and poor credit rating, Ingredion does not qualify as one of our Top 100 Dividend Stocks.

Ingredion Inc. Dividend Yield Chart (Click to enlarge)

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Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

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