Alaris Royalty Corp ALARF

scotia and cibc updates and capital deplyoyment cash flows

[mickeymouse]

Both Scotia and CIBC are very negative on future capital deployment and they are both expecting redemptions to accelerate in their modelling.

When you look at the numbers they are both ignoring the guidance given by the company that 20 million of new capital deployed increases cfps by .04 - last year Alaris deployed 172 million and the ceo on the call said he expects this year to exceed that total. Even if they deploy half of that that is going to be a  bump in cash flow.

Somehow Scotia has a CFPS estimate of 1.64 for 2018 and 1.60 in 2019 - so bascially a lot of redemptions and no capital being redeployed - does that make sense based on what has happened the last few years. Even more interesting is that in Exhibit 5 of their report they then have CFPS for 2018 at 1.80 which is what the company is projecting - somewhere between page 1 and 5 of their report one would think they would check their numbers to make sure they are consistent.

The bottom line is even with a PF redemption the payout ratio is still only 92.5% (1.75/1.62).  If they deploy any capital at all that ratio will drop.  If you really want to sell a company that currently pays a 10.5% dividend that is more than fully covered feel free to do so and I thank you in advance for increasing the dividend yield in my portfolio.