Mosaic's Monster Dividend (MOS)

The Mosaic Company (NYSE: MOS) has decided to start paying out a dividend to shareholders.  The company’s board of directors has declared a quarterly dividend of $0.05 per share on the common stock payable each quarter.

This dividend will be paid on August 21, 2008 to stockholders of record as of the close on August 7, 2008.  Future dividends declarations are subject to approval by the board.

Mosaic closed today at $129.77.  If we take this $0.05 dividend andannualized it we get a $0.20 annualized dividend.  Based upon today’sclose, that’s a whopping dividend yield of 0.15%.

While this closed down over 6% and while this is down close to 20% fromits recent highs, this is hard to consider a gift or any greatannouncement.  Dividends are generally thought of as management’sbelief and interpretation that the company the represent will havesolid earnings and be able to pay that dividend for years.  Isn’t theagriculture, fertilizer, and potash sector supposed to have solidguidance and pricing power for the foreseeable future? 

For some reason, it doesn’t seem like shareholders are going to bechomping at their bits to capture that dividend.  In fact, that’s trueeven if it split its stock 5 for 1.  This a monster dividend all right, but it’s a tiny monster that can’t scare anyone.

Jon C. Ogg
July 17, 2008