December 10, 2018

Alliance Grain Traders (AGT)

Alliance Grain Traders (AGT) is a multinational conglomerate that has assets throughout many different agricultural regions.  The current version of the organization was founded in 2007 when the Agtech Income Fund purchased Saskcan Pulse Trading.  The fund was re-named the Alliance Grain Traders Income Fund and instantly became a force within the agricultural pulse trading community.  They year 2009 was a busy one for the company.  They saw the writing on the wall when it came to tax code changes that would influence income funds across many sectors.  AGT got out in front of the ball, and incorporated into a purely dividend-paying corporation.  They also took part in a massive acquisition of the The Arbel Group.  This essentially allowed Alliance Grain Traders (AGT) to vertically integrate many of their services.  They now hold large market share in the processing, trade, and export of speciality crops.  As part of the Arbel acquisition, Alliance also bought the rights to a large pasta company in Turkey that sells their product across around the globe.  The company now boasts that it is the largest lentil and pea splitting company in the world.  They own 27 different sites across Canada, the USA, Turkey, China and Australia, and ship to almost 90 countries around the globe.

 

Alliance Grain TradersThe Alliance Grain Traders (AGT) has the following mission statement, “To provide a clean and quality product with reliable and timely shipments, competitive pricing and flexible delivery arrangements for bulk, bagged and packed pulses and foodstuffs. Our commitment to supply guaranteed quality to our clients is ensured through comprehensive production, execution and quality control.” The company employs over 400 full time workers around the world.  The core of the company is primarily its various pea and bean crops (yellow split peas, red split peas, kabuli split peas, black beans, kidney beans and navy beans just to name a few); however, it is diversified with other agricultural crops, and is constantly on the lookout for additional acquisitions that would provide added value for their shareholders.

 

Alliance Grain Traders (AGT) recently released to the press that it has acquired the complete asset portfolio of Canz Commodities.  It is a chickpea producer located in Narrabri, Australia (about 500 km from Sydney).  The assets included processing plants, real estate, storage equipment and various other chickpea handling materials.  The initial price tag, plus the cost of budgeted improvements will likely run the company about $8 million (CAD).  Canz was purchased through a subsidiary of Alliance called Australia Milling Group PTY Ltd.  Murad Al-Katib, President and CEO of AGT, had this to say, “As we have previously stated as one of our strategies, AGT continues working to grow our chickpea, faba bean, bean and lentil platforms globally. Australia is becoming a world class pulses producer and any major pulse company must look to Australia as a key origin for products and processing. We believe this acquisition assists us in executing our growth plans and building a sustainable value-added pulses business in Australia and worldwide.”

 

With the changing demographics of the world shifting to cultures that consume much of the pea and bean market, the future looks bright for Alliance Grain Traders (AGT).  The stock is trading at around $23 at moment.  It has an annual dividend of $.60, giving it a dividend yield of about 2.5%.  While the company looks to have solid growth prospects, I believe that there are more mature companies within the Canadian agricultural sector which are a better fit for dividend investors.

 

Alliance Grain Traders (AGT) Dividend Stock Graph:

TSE AGT

Alliance Grain Traders (AGT) Dividend Stock Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
AGTAlliance Grain Traders Inc22.522.419.950.49101131.00112-0.1841009

 

 

Speak Your Mind

*