The stock of farm input provider FMC Corp. (FMC) is down 45% on Oct. 30 after the company reduced its dividend payout to shareholders by 83%.
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Going forward, FMC said it will pay a quarterly dividend of $0.08, down from $0.48 previously. The dividend cut has sent FMC stock spiraling downward. The dividend cut was announced by management alongside the company’s latest financial results.
FMC, which specializes in chemicals designed to protect farmers’ crops, reported earnings per share (EPS) of $0.89, which topped the $0.85 forecast among analysts. However, the company announced revenue of $961 million, which was short of the $1.1 billion expected on Wall Street.
Debt and Dividend
FMC, which is headquartered in Philadelphia, ended the year’s third quarter with $4.5 billion of debt. Management guided for earnings of $850 million in 2025, below Wall Street’s projection of $911 million. The combination of slowing growth and hefty debt led to the dramatic divided cut, said senior executives.
Before the dividend cut, FMC stock was yielding about 6.6%. Going forward, the stock’s dividend yield will be about 1.6%, depending on the share price. Even before the dividend cut, FMC stock had struggled, falling 40% on the year, hurt by falling farm income and weak agriculture prices.
Is FMC Stock a Buy?
FMC Corp.’s stock has a consensus Moderate Buy rating among 13 Wall Street analysts. That rating is based on five Buy and eight Hold recommendations issued in the last three months. The average FMC price target of $40.08 implies 144% upside from current levels. These ratings might change on news of the dividend cut.
