RE:Morguard hidden agendarobbie88 wrote: Compared with Q3, revenue, operating income, FFO, AFFO were up significant. Payout ratio is 46.2%. MRT.UN has over $140M liquidity plus tons upward refinance available.
Total cash distribution was less than $1M per month. By cutting half dividend, MRT.UN can save half million or $6M per year. There is no justification to cut the dividend by half.
Without cutting the dividend, MRT.Un shall breakout tomorrow.
Obviously, Morguard wants to take MRT.UN private and wants to reduce the price tag.
You could argue that since the share price is low and they don't want to kill the drip, the reduction of the dividend will limit the issuance of new shares (dilution at a low share price) and will make the issuer bid more effective.
Look at it this way... the drip had the potential to issue 8% more shares this year while the recent issuer bid could allow for the purchase of 5% of the shares issued... so they basically would only be buying new shares issued.
Imo, they should have just killed the drip, but at least reducing the dividend will issue less cheap shares through the drip and they may even reduce the total outstanding shares if they are aggressive with their stock repurchases.