Agrium to look at its dividend: CEO

Fertilizer and farm products producer Agrium Inc. reported its second-quarter profit jumped 39 percent and says it expects demand to rise in the latter half of 2011.

President and CEO Mike Wilson tells BNN the company’s cash pile continues to grow—it now has nearly $1 billion in cash on hand.

“Our shareholders want us to continue to grow. But we have excess cash, we’ve bought shares back in the past, we’ll do that again. We’ll look at our dividend as well.”

Horst Hueniken, managing director and research analyst at Stifel Nicolaus, tells BNN why increasing dividends is a good idea.

“Investors are more comfortable investing the cash return than allowing management to go ahead and invest,” he says. “Especially if we are getting closer to the cycle peak, you start worrying about valuations and overpaying.

“There may not be as many opportunities ahead of them at this part of the cycle as there was a year ago,” Hueniken says.