RE: RE: RE: RE: PPL hits $30!
Am I the only one out here who is surprised by your statement "At that point it's anyones guess." Their payout ratio is coming down and will continue to do so as more projects come on stream. They have a growing list of projects that will provide substantial cash flow for years to come. They don't have any "tax losses" in the last quarter. In fact during the past nine months they had an effective tax rate of 25% on some $155 million of pretax income as noted in note 6 of the latest quarterly statement and paid cash taxes. In 2013 they will have substantially more cash flow and the payout ratio will be much much lower. To make the statement you did is illogical and uninformative and misleading! The shares have treated us well over the last couple of years as they maintained their dividend which has helped propell the stock to these levels. ($31) To cut the dividend in 2013 when their cash flow will be even higher would be unimaginable for anyone of their board members to even consider. Because they have predictable and stable cash flows (customers under long term contracts and a near regulated return and a growing list of projects financed internally) they are able to provide comfort and long term direction to their shareholders just like IPL. There are no if and buts... earnings and cash flow will be going up and the dividend is solid and will start to grow come 2013. Corporations don't cut dividends unless they are under severe pressure. Should projects dry up over the long term then they won't have to fund them from internal cash flow and debt. Depreciation will be large on top of earnings such that under those circumstances share buybacks would be considered... not cutting the dividend. However reading their latest capital expenditure release this company has a great future beyond 2013! Investors are just beginning to understand this as we witnessed the past week.