Southern Copper Corporation (NYSE:SCCO) to Issue Dividend Increase - $1.30 Per Share

Key Points

• Southern Copper raised its quarterly dividend 18.2% to $1.30 per share, payable November 19 to shareholders of record November 3. The annualized dividend is $5.20, representing a 2.9% yield.
• The current payout ratio is elevated at 117.1%, meaning earnings do not fully cover the dividend; however, analysts expect next year’s earnings to lower the projected payout ratio to 66.5%.
• Southern Copper exceeded quarterly expectations, reporting $2.15 in EPS and $4.70 billion in revenue. The company also announced a 1.0106-for-1 share split, with shares issued after the November 2 market close.

Southern Copper Corporation (NYSE:SCCO - Get Free Report) announced a quarterly dividend on Thursday, October 15th. Shareholders of record on Tuesday, November 3rd will be paid a dividend of $1.30 per share by the basic materials company on Thursday, November 19th. This represents a $5.20 annualized dividend and a yield of 2.9%. The ex-dividend date is Tuesday, November 3rd. This is a 18.2% increase from Southern Copper's previous quarterly dividend of $1.10.

Southern Copper has raised its dividend by an average of 0.2% annually over the last three years. Southern Copper has a payout ratio of 117.1% meaning the company cannot currently cover its dividend with earnings alone and is relying on its balance sheet to cover its dividend payments. Research analysts expect Southern Copper to earn $7.82 per share next year, which means the company should continue to be able to cover its $5.20 annual dividend with an expected future payout ratio of 66.5%.

Southern Copper Stock Performance

SCCO stock opened at $177.60 on Friday. The company has a debt-to-equity ratio of 0.63, a quick ratio of 4.56 and a current ratio of 5.06. The stock has a market capitalization of $148.18 billion, a price-to-earnings ratio of 23.25, a PEG ratio of 1.64 and a beta of 1.11. Southern Copper has a 1 year low of $119.25 and a 1 year high of $223.88. The stock's fifty day moving average is $200.92 and its two-hundred day moving average is $187.49.

Southern Copper shares are set to split on the morning of Tuesday, November 3rd. The 1.0106-1 split was recently announced. The newly issued shares will be issued to shareholders after the closing bell on Monday, November 2nd.

Southern Copper (NYSE:SCCO - Get Free Report) last released its quarterly earnings results on Wednesday, October 21st. The basic materials company reported $2.15 EPS for the quarter, topping the consensus estimate of $2.03 by $0.12. Southern Copper had a net margin of 37.16% and a return on equity of 53.46%. The business had revenue of $4.70 billion during the quarter, compared to analyst estimates of $4.49 billion. During the same quarter in the prior year, the firm earned $1.35 earnings per share. On average, research analysts predict that Southern Copper will post 8.03 EPS for the current year.

Insiders Place Their Bets

In related news, Director Luis Palomino Bonilla sold 202 shares of the company's stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $196.79, for a total value of $39,751.28. Following the completion of the sale, the director owned 1,723 shares of the company's stock, valued at $339,066.65. This represents a 10.49% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Insiders have sold a total of 603 shares of company stock valued at $120,213 over the last three months. Corporate insiders own 0.07% of the company's stock.

Hedge Funds Weigh In On Southern Copper

Several large investors have recently bought and sold shares of the stock. BlackRock Inc. acquired a new stake in shares of Southern Copper during the 2nd quarter valued at about $1,729,500,000. Bank of America Corp DE bought a new stake in shares of Southern Copper in the 2nd quarter valued at approximately $318,448,000. Legal & General Group Plc acquired a new position in Southern Copper in the second quarter worth approximately $149,739,000. Healthcare of Ontario Pension Plan Trust Fund acquired a new position in Southern Copper in the first quarter worth approximately $85,342,000. Finally, Deutsche Bank AG acquired a new position in Southern Copper in the second quarter worth approximately $85,770,000. Institutional investors and hedge funds own 7.94% of the company's stock.

About Southern Copper

Southern Copper Corporation NYSE: SCCO is a mining and metals company engaged primarily in the exploration, development, extraction, processing and production of copper. The company also produces molybdenum, zinc, silver and lead, along with related byproducts. Its operations include open-pit mines, underground mines, concentrators, smelters, refineries and other processing facilities.

Southern Copper operates mainly in Peru and Mexico. Its Peruvian assets include the Toquepala and Cuajone copper mines, while its Mexican operations include the Buenavista del Cobre and La Caridad mines, as well as associated processing and infrastructure facilities.

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