The Dynamic Dividend

Noranda Initiates Dividend, Adds Supplemental Payout

Noranda Aluminum Holding Corporation (NOR) declared a quarterly dividend of $0.03 per share this morning, a first for the producer of aluminum products. The company also declared a supplemental dividend of $1.00 per share.

Both payouts carry an ex-dividend date of November 10, and will mark the first time Noranda has returned cash to its shareholders since coming public in May 2010.

Analysts currently expect Noranda to earn $1.22 per share both this year and in 2012, giving the company a sub-10% payout ratio. Noranda also has about $1.26 per share in cash on its balance sheet, which the supplemental dividend will drain down to roughly $0.26 per share — enough to power its new payout for more than two years.

Shares of NOR are trading at $9.24, where they now carry a 1.30% dividend yield. Including the supplemental dividend, Noranda will distribute more than 11% of its current share price via dividends this month.