OTCPK:TMBMF - Post by User
Comment by
dosperroson Jul 26, 2017 11:02am
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Post# 26510924
RE:RE:TMB earnings
RE:RE:TMB earningsIt'll be great from the dividend vantage as well. The big "if" was always just earnings given RYAM's acetate exposure. A few welcome changes for the combined will be a:
1) Steep drop in taxes thanks to TMB's rough decade,
2) Sharp drop in interest on the debt,
3) Dramatic increase in market recognition and credibilty
In short, the $400M base + $50M synergies (very conservative per the analysts) will flow through largely to free cash. They can rapidly de-lever based on this, but also increase the div.
Say FCF is 300M as a wild guess. The div is currently 7cents; at 52M shares that's $3.6M per quarter or $14.5 per year. Call that last number 5% of FCF. It could quadruple.
The spolier could be the currency trade that'll underpin it. Ideally we all buy in at 80cents, and the dollar long run stays in the 60 to 80 cent range. A return to greenback pairity would suck.