RE: RE: RE: Q3 not good below expectations.. PAYOUT RATIO
Though I sold the . last of my PSN a few weeks ago, I have continued to read all the posts with a view to perhaps buying back in ,after the 3rd quarter release. After reading this report there is no way I will buy back in until they kill the dividend and stock is half what it is now.
The company, and most posters continue to quote cash flow before interest, taxes and most important ,the cost of the tanks. The only number that means something in the long run, in the rental business, is net income- this is not a real estate rental business where cash flow is king, and the value of the real estate rented out , in the long run does not depreciate. These tanks will not last for ever, so you need to consider a rational charge for the tanks , over their useful life, to see how well they are doing and if dividend covered.
Net income for the quarter was about 8 million. The dividend for quarter was about 22 million. The payout ratio is negative, big time negative- even without the bad debt,they are still negative. Why are they keeping the dividend at these levels after these earnings?? In effect they are borrowing from the bank to pay a dividend. This is ridiculous.
If PSN drops to around 6 to 7 bucks, and they get rid of the dividend to keep cash flow, then I will buy back in, but not before they kill the dividend to conserve cash and spend it on new products, and the stock it sells at a realistic price.( less than 7 bucks)
These numbers are far worse than anyone could imagine- Am surprised there was no earlier communication from PSN that sales were off by this amount, or the 500 tank objective was way behind schedule etc- or prices achieved on rentals were down.
Hope things get better