The Northern Star Cooperative is a very successful Co-op. The past 35 years has seen sales growth from 5.5 million dollars to nearly 50 million dollars annually. Due to this increase in sales, the Northern Star Cooperative has been able to reward its patrons with the retiring of all stock up to 2000 and the paying of an average dividend of near 7% over the past several years.
In 1998 the Board of Directors voted to begin an annual tradition of paying back a portion of all patrons’ stock each summer. They also voted to pay back all earned equities to patrons who have reached their 65th birthday and to give them 100% of their dividend in cash thereafter. What does this mean to you?
Example 1: If you purchase $1000.00 of product from the Northern Star Cooperative in a year, and have reached the age of 65, you will receive a cash dividend of $70.00 at the end of the year. This is based on a 7% dividend payout.
Example 2: If you purchase $1000.00 of product from the Northern Star Cooperative in a year, and have not reached your 65th birthday, you would receive a cash dividend of $14.00 and $56.00 in stock (equity in your name) for revolvement in the future. This too is based on a 7% dividend payout. The stock (equity) will accumulate each year until you reach 65 or until the Board of Directors decide to pay a portion of it back.