Chemours (CC): Can You Trust a 14% Dividend Yield?

DuPont has been the target of several activist investors led by Trian Fund Management. The culmination of Trian’s efforts has been to force DuPont into solely focusing on faster-growing specialty chemicals businesses while shedding some of the commodity/basic chemicals assets it owns. The spinoff of these assets — now known as Chemours (CC) — will officially start trading as a detached firm on July 1, but so far, CC’s “when issued” shares have been a real dog.

DuPont (through Chemours’ management) has agreed to pay an initial quarterly dividend of $100 million in September. That works out to be 55 cents per share, or $2.19 annually — which would give CC stock an initial yield of more than 14%! CC stock is going to be a volatile train wreck for a few quarters until it can get its act together as TiO2 pricing remains weak. However, for longer termed investors, that could provide a buying opportunity for one of the strongest players in the sector. Chemours deserves to be on your watch list, just don’t pull the trigger yet.

Source: InvestorPlace

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