OTCPK:STZHF - Post by User
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domcolumbaon Jul 04, 2019 9:14pm
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Today's Globe & Mail
Today's Globe & Mail Why companies should favour variable dividend policies over fixed ones
Stocks that pay unusually large yields can be tricky to deal with. They may have recently announced a dividend cut or investors might expect them to reduce their dividend soon. Alternately, they might have paid a special one-time dividend that may not be repeated.
Stelco Holdings Inc. provides an example of the latter. The steel maker based in Hamilton has a yield north of 10 per cent including a recent special dividend of $1.23 a share. But Stelco’s regular quarterly dividend is 10 cents a share, which would result in a yield of 2.7 per cent. While investors might hope the firm will continue to pay big special dividends, they should think of them as bonus payments rather than regular income. Bargain hunters will note that Stelco trades at just five times earnings.