OTCPK:VGIPF - Post by User
Comment by
InvestorSuperfanon May 14, 2013 6:21pm
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Post# 21391842
RE: Simple yet worthy advice
RE: Simple yet worthy advice Interesting analysis - thanks for posting it. RPL's producing properties do have good netbacks, a low decline rate, etc. The one item the writer does not mention is debt. Your cash outflows include dividends, capex, administrative and other costs, and debt repayment (along with accumulating interest, which in RPL's case averages 3.8%). Unfortunately, we'll have to wait and see what the "new" RPL looks like before we can assess the viability of the dividend. Also, good point about having "a realistic payout model from the beginning" - Renegade used to make a lot of hay about an all-in payout ratio of less than 100% (dividend + expected capex) when they announced the dividend. Again, this calculation does not account for debt, and Renegade was about to take on a sizeable amount of new debt. We know what happened since then.