GREY:ALARF - Post by User
Comment by
SunsetGrillon Mar 06, 2018 2:10pm
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Post# 27669625
RE:RE:Whatever that is worth
RE:RE:Whatever that is worth OK OK WHOA - I meant the ratio has to come down not the divy - cmon guys; they will not do that unless as a last resort [
quote=mickeymouse]With the distribution at 8.96% at the current share price there will certainly be calls to reduce the distribution - the question is why would you do that?
The current payout ratio is 92.5% and this should improve in April as they expect the resumption of distributions from Kimco and an increase from SCR - about an extra 200,000 per month from the sounds of the conference call which would mean an extra 2.4 million a year - that will translate into a .06 increase in cash flow which would then drop their payout ratio to 89.5% (1.62/1.81) going forward.
Last year they deployed 172 million - so to be conservative lets say they only deploy 100 million this year - with the guidance provided that would equate to a .20 increase in cash flow - now you are down to a 80.5% payout ratio (1.62/2.01) - add some extra G/A for the new file and 82% would be a reasonable expectation. If they are as successful as last year in deploying capital the numbers will look even better - by their own admission competition is stiff but rising interest rates are a tailwind.
There seems to be an ingrained belief that a dividend over about 6% means a company is in trouble - that is not the case here at this point in time - this management team was very succesful before they went public and they continue to have a high success rate on their investments - they have a lot of dry powder for investments and they don't need to dillute - if the share price declines further from here it will be from retail panic, investment bank subversion as they know they won't be getting any commissions from new share offerings in the near future, or shorts jumping on the dividend is going to be cut bandwagon.
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