TSX:STB.DB.A - Post by User
Post by
slimjim11on Jan 26, 2016 10:29am
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Post# 24493692
P/E ratios and valuations
P/E ratios and valuationsTwo things drive STB's share price: (1) the yield is attractive, and analysis of cash flows and payout ratios drive my comfort the yield is sustainable, (2) the P/E and P/BV ratios are high, and these hold back the valuations for investors who focus on these metrics. I respect that position. I've made a lot of money holding Chartwell, which has reported negative earnings for the past eight years, while cash flowing a solid dividend. The share price has tripled as the "unsustainable" yield of 14% became a "sustainable" yield of 4%, and the monthly dividend stayed exactly the same. I expect to make a lot of money on STB, and am paid handsomely while I wait.