Dow, In a Sweet Spot, Raises Dividend 67%

Apr.15.11 | About: Dow Chemical (DOW)

April 14, 2011 The Dow Chemical Company (NYSE: DOW) announced today that its Board of Directors has declared a 67 percent increase in the second quarter dividend, from $0.15 per share to $0.25 per share.

“This dividend increase clearly illustrates our Board’s commitment to increasingly reward our shareholders as we continue to grow earnings,” said Andrew N. Liveris, Dow’s chairman and chief executive officer. “The growth potential of our transformed enterprise was on full display in 2010.

Our enhanced financial flexibility and robust portfolio of businesses make us well positioned to deliver sustainable growth, and today’s announcement further demonstrates Dow’s commitment to continue to enhance value for our shareholders, and to pursue a dividend policy that is reflective of a growth company long term.”

The dividend will be payable on July 29, 2011 to shareholders of record on June 30, 2011. This will mark the 399th consecutive cash dividend issued by the Company. Dow has paid its shareholders cash dividends every quarter since 1912.

This is overdue, but, being at the high end of what I thought they would do ($.20 -$.25) when I posted on it last October one can’t avoid being pleased. The ability of Dow (DOW) to be at the high end is due to recent debt repayment moves that have freed up the extra cash to hit the high end.

Dow is in a sweet spot now, with the spread between oil and nat gas at historic levels, Dow for lack of a better term is printing money as they price at the oil and and their costs are at the nat gas end. Traditionally that spread is at 6-1, it now sits at 25-1.