Southern Copper’s Dual Dividend Strategy Amidst Analyst Debate

Investors in Southern Copper are set to receive a dual-pronged return of capital, combining an increased cash payout with a stock dividend. This move comes as the share price trades near record levels, creating a sharp divergence in analyst opinion on its future trajectory. A notable rise in short interest adds another layer of complexity to the investment thesis.

The company's management recently enacted a two-part compensation package for shareholders. The quarterly cash dividend was raised from $0.90 to $1.00 per share. Concurrently, a stock dividend of 0.0085 new shares for each existing share held was issued. This stock distribution functions similarly to a minor 1.0085-for-1 stock split. On an annualized basis, the cash dividend now stands at $4.00, yielding approximately 2.0% at current price levels.

The technical adjustment for the ex-dividend date resulted in a theoretical share price decline of about 5.2% last Tuesday, with shares closing at $197.55. However, the equity recovered in subsequent trading sessions, currently trading above the $200 threshold.

Widely Diverging Expert Opinions

Despite robust fourth-quarter results, professional assessments of the stock's value vary dramatically. Price targets from analysts present a broad spectrum, ranging from a low of $119.68 to a high of $228.90, with no clear consensus in sight.

Some institutions, such as Wells Fargo, have recently raised their targets to $192, citing the attractive dividend profile and stable metal prices. In contrast, other firms maintain a cautious stance. Critical analysts continue to rate the stock as "Underweight" or "Sell," warning that current valuation multiples may be stretched compared to historical norms.

Should investors sell immediately? Or is it worth buying Southern Copper?

Growing Market Skepticism

Data on short selling signals additional market caution. The short interest has recently climbed to 10.94% of the free float, indicating a significant portion of market participants are betting on a price correction.

This trend is accompanied by insider selling activity. In early February, Director Lerdo De Tejada Leon Contreras disposed of approximately 9,300 shares. While such transactions are often part of routine portfolio management, their timing near record highs draws added scrutiny.

The upcoming dividend payment on February 27 marks the next key date for shareholders. The stock's ability to consolidate above the $200 level will be a critical factor for its near-term direction.

Key Details:
* Capital Action: The ex-dividend date for both the cash and stock dividend was February 10, 2026.
* New Distribution: $1.00 per share (quarterly) plus a 0.0085 stock dividend.
* Payment Date: Funds and shares will be credited on February 27, 2026.
* Analyst Targets: Wide range from approximately $120 to $229.
* Short Interest: Increased to about 10.9% of the free float.