TSX:CHE.DB.E - Post by User
Comment by
Whitecapson Nov 26, 2020 5:43pm
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Post# 31985811
RE:Dividend to profit ratio
RE:Dividend to profit ratioCorrect, it is not good. Chemtrade currently does not make a profit (it's profit for the most recent quarter was actually negative).
That being said, it is important to remember that profit does not equal cash flow. Chemtrades cash flow is positive, and for this reason they can pay out the distribution that they do. A company like Chemtrade has a high number of depreciable assets and thus they have high depreciation expense on their profit statement. But depreciation is a non-cash expense and so it doesn't affect their cashflow.
This is why Chemtrades managment always talks about EBITA as opposed to profit. It's up to you as an investor whether you believe EBITA is a good measure to use to evaluate a company or not.