NAL Energy Corporation T.NAE

From CIBC

[lilswede]

 

 

? The company also cut its monthly dividend by 29% to
.05/share (from
.07/share). While consensus was divided on whether or not NAL would reduce its dividend, we did not believe NAL would cut. As such, we consider the cut a negative surprise (as we believe the market will).

? With its reduced dividend, NAL screens as one of our most sustainable names with a 2012E total payout ratio of 96% (including the DRIP) vs. the group at 111%. With a current yield of ~8% (vs. the group avg. of 5.4%), we believe NAL makes an attractive investment for yield-focused investors.

? We are maintaining our Sector Outperformer rating with a revised price target of $10.50 (prior $13.00). The company trades at a 2012E EV/DACF multiple of 5.5x and a P/Risked NAV of 52% (versus the group averages of 8.2x and 76%, respectively).

Stock Price Performance

Source: Reuters