TSX:LIQ.DB.B - Post by User
Comment by
Goldbuggy1on Feb 03, 2016 6:50pm
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Post# 24522098
RE:RE:This thing may as well be called Oil Stores
RE:RE:This thing may as well be called Oil StoresStompinTom wrote: Ironically, the cost of capital on the Shares is higher than the debt right now so if they are leaving the dividend in tact and are cashflow neutral to positive, the buyback is a great idea as it is giving a cashflow return of almost 15% here.
Yes, I believe you are exactly right with you assessment if as you say the company decides to leave the dividend in tact and cash flow is at least neutral. There is no reason to think otherwise as LIQ has been paying this monthly dividend of $0.09 per share since they started as a public company in 2004, and 2015 is shaping out to be a better year than 2014 was. So they would save 15% on a share buyback and as you said. But one of the added bonuses to this is by buying back say 10% of there shares (2.75M) they no longer have to pay a $1.08 a per year for these shares down the road either. So every year they will save almost $3M in dividend payments. So a gift that keeps giving.