Sylogist Ltd T.SYZ

NCIB

[AlwaysLong683]

Just because a company initiates an NCIB that is accepted by the TSX doesn't mean it actually has to buy back any shares. The NCIB simply provides them with the opportunity to do so should they wish to engage in share buybacks.

In my view, looks like SYZ is trying its best to spin the huge dividend cut. The share price is low, they don't have the money to both buy back shares and maintain the dividend, so they almost eliminate the dividend and say they can put this money to better use than shareholders can. The new 0.01 per quarter offering technically still makes them a "dividend-paying" company, though income investors won't be able to retire collecting one cent per share per quarter. Thus, those in it for the yield sold.

Most companies are loathe to cut the dividend by any amount as it shows that the dividend shouldn't have been that high in the first place if they couldn't provide themselves with a financial cushion to take advantage of a low share price via an NCIB or make acquisitions. According to The Dividend Channel, SYZ has been increasing its dividend each year since 2010, so no wonder shareholders were shocked when SYZ announced they were cutting the dividend from 0.125 per quarter all the way down to 0.01 per quarter.