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Lamb Weston Hikes Quarterly Dividend, Raises Buyback Plan

Food processing company Lamb Weston Holdings, Inc. (NYSE:LW) revealed that its board of directors has approved a hike to the quarterly dividend and increased the existing share repurchase authorization.

Dividend

The company’s board declared a quarterly common stock dividend of $0.245 per share, up 4 cents from the prior payout. The dividend will be paid on March 4, 2022, to shareholders of record as of February 4, 2022.

The company’s annual dividend of $0.98 per share now reflects a dividend yield of 1.7%, based on Friday’s closing price.

Additional Share Buyback Authority

Lamb Weston raised its existing share buyback plan by up to an additional $250 million of its common stock. The program comes with no expiration date.

Under the program, shares can be repurchased in the open market, through privately negotiated transactions, or via a combination of the foregoing. The timing and amount of stock repurchases will be subject to the company’s evaluation of market conditions.

Analyst’s View

Last week, Goldman Sachs analyst Adam Samuelson maintained a Hold rating on the stock and lowered the price target to $69 from $71. This implies 18.9% upside potential to current price levels.

Overall, the rest of the Street has a bullish outlook on the stock, with a Strong Buy consensus rating based on 4 Buys and 1 Hold. The Lamb Weston price target of $75 implies upside potential of about 29.2% from current levels.

Smart Score

LW scores a 9 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to Outperform market averages.

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