RE:RE:RE:RE:" LOWEST PAYOUT RATIO SINCE 2008 " (Jan.21 at 3:35 PM EST)decent plan indeed, that was the only reason I wrote the raise the divvy thing was to get them all jumping around again, lol. cheers!
sclarda wrote: Shirtlessnomore wrote
they should increase the divvy to an even quarter. "So it sounds like they will have 40-70M in surplus cash to execute the buyback"
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What they should do is cut the dividend back to 20 cents per month at the least. Investors would hardly notice the differance but it would leave the company with another aprox. $55 million. Add that to the average of your two numbers for existing cash surplus and that would equal $110 million cash surplus this year.
That could allow them to buy back aprox. 5 million shares at todays prices which would save them aprox. $ 12 million per year in dividends next year with the lowered 20 cent monthly dividend.
Doing this for the next 3 years would result in aprox. 16 million shares being repurchased which would save the company aprox. $32 million in annual dividend payout. Add that to the aprox. $55 million in annual dividends the company would save by cutting the monthly dividend to 20 cents and the amount payed out in dividends would be aprox. $87 million per year less than they are currently paying.
This would be equal to reducing the payout by about 20% from the current amount payed out every year
If they were to cut the dividend to 20 cents monthly that would still equal a very nice aprox. 11.5% yield at todays shareprices while giving the company an additional $55 million in cashflow immediately and up to $87 million in additional cashflow in 3 years which they could use to lower debt, make asset purchases, more share buybacks etc.
The slightly lowered dividend may also calm the dividend cut fears and stabilize or even increase the shareprice.
Seems like a little pain for a lot of gain to me.