I note that my previous post regarding the upcoming dividend has stimulated some interesting conversations "around the traps".
It could be that my post has been misinterpreted by some as a mild complaint about the dividend policy of Cellestis. It is not. I believe that the dividend policy of Cellestis to date has been both reasonable and sensible - it has provided investors with a taste of the rewards to come while ensuring the ongoing strength of the Company balance sheet.
What I have tried to do is to approach the matter of the dividend policy of Cellestis, "going forward :)", in a dispassionate and logical manner. Hopefully, my logic, accounting and understanding of financial and investing matters is reasonable enough that my conclusions are realistic.
In the end, I guess I am making a statement about what I believe will happen. I believe that the Company will either increase the dividend payout percentage or they will tell us why they haven't done so. Of course I have no more knowledge regarding this than any other pundit, it is just that there is no reason to believe that the Company won't do this.
Just for interest, if we were to assume a NPAT of $10m for the year and a dividend of 5c for the half then we would have an annualised current PE of around 27 and an annualised dividend return of 3.7% which grosses up to 5.8% - not too bad at all, given the growth prospects of Cellestis.
One other non-consequential little matter. I have received a number of communications from people pointing out that my previous post on dividends has been reposted in another place. That was done with my permission. It was my suggestion that the post not be accredited to me, only because that particular forum has a policy that precludes that. As I have always said, I maintain no copyright over anything that I say - if anybody finds any of it of interest then I am quite happy for it to be reposted anywhere.
Hi Forrest
ReplyDeleteThe past couple of dividends have been fully franked and there is no reason to believe future dividends will not continue to be fully franked as well, this is an added bonus for most of us. Also if we continue to think the company is a good investment then we can reinvest those dividends back into the company by purchasing more shares.
Regards
Bigtosky
Hi again FG
ReplyDeleteI think you kind of said that yourself!
Bigtosky
Bigtosky... I would take your comment even further. The only thing I can remember the company ever saying in the past about dividend payments is that it is their intention that dividends will be fully franked. This will limit the quantum of the dividend to the extent that Australian company tax is paid on profits.
ReplyDeleteFor this reason alone, I sincerely doubt that we will see payout ratios of 60% to 70% of NPAT.