Simple dividend math, every $1M D/E increase = $4.48/shareSome simple math on the impact that raising dividends could have on the stock.
Let's evaluation the impact that an $1M increase in the dividend could have.
The stock currently trades at 2.12%. For those of you who may not know how to calculate this, here is math
2023 Dividend amoung in $1.91M (from 2023 AIF) or $0.16/share
You can calculate the dividend yield by dividing the D/E by the stock price 0.16/8.62x100=1.86%
The question then becomes, what would the stock price be if you increased the dividend and the market valued the stock holding the same relationship that the stock currently trades at.
So, if we were to increase the dividend by $1M then what would the stock do.
It would increase in price by $4.48/share. $1M/.0186/12M (shares outstanding)
So I ask you, what would you rather have, less shares outstanding or higher dividends.
in 2023, the AIF says the company bought back 400k share. If we assume they paid $7.50/share that was $3M spend in share buy backs.
If the same $3M were paid to shareholders where do you think the stock would be today? If we use the math above, every $1M increase in dividends equates to a $4.48/share increase in value. So if the $3M was paid out, it could have added $13.44/share in value.
Using today price, the 12 month share price change was $1.31/share ($8.59-$7.28).
CUT THE NCIB and raise the dividend!!!!!
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