Pivot Technology Solutions Inc. T.PTG

What's the true yield?

[PatiencePays123]

What's everyone's guess to what the dividend yield should be for this stock? It's had the same dividend for years now and has been paying it consistently. Any guesses? 5%? 6%? 7%?

[digitel]

This post has been removed in accordance with Community Policy

[janeintoronto]

For a tech stock, I'd expect a lot lower yield, but I think Pivot's high yield reflects wariness. The co has high sales but very low income, and the strategy of acquiring a lot of companies did not always work. For a while, they went on and on lamenting the low stock price (while they should have been running the company). The CFO decided to start this excessive dividend to address this

[lscfa]

Dividend is not excessive....   $US 2019 (9 mo) 2018 2017 2016 Cfo 10,083 9,235 12,071 12,228 Adj. ebitda  19,333 15,539

[PatiencePays123]

Agreed. Dividend is not excessive but compared to other tech companies the yield is excessive. But I agree with your math, it is more than covered with its cash flows.

[Shirtlessnomore]

And they actually COULD raise the divy due to the low payout ratio, so if the share price moved up to put the yield more inline they probably would increase it, say around 3.20 a share would result in about a 5% yield at the current 4 cent payout. I'd prefer 1.33 cents per month.

[PatiencePays123]

Yup agreed. It is a chicken and egg scenario. They can afford to increase the dividend, but doing so at the current market price would raise the yield even more, and people would view the higher yield as a red flag if they know nothing of the company.

[fatcharlie]

Yup, totally agree.  Good dividend right now any higher raises red flags.  The company is well managed and flying under the radar.  What is unusual is for a small tech company to pay any dividend at all.  I bought awhile ago thinking PTG would be a ;ikely takeover target.  We should really be over the $2 threshold soon which will attract more attention.  In the

[lscfa]

also, consider cash flows from operations if Smart Edge costs and restructure costs are backed out....     $US 2019 (9 mo) 2018 2017 Cfo 10,083 9,235 12,071 Smart Edge costs 4,915

[PatiencePays123]

Woah. That's like over 25 cents a year in incremental cash flow if you add back smart edge costs and restructuring. Thanks for that tid bit! I will be buying more stock this week.