RE:Everything's up... Q1 has got to move this stock higherzack50 wrote: Full year 2021 results: - EPS: CA$0.24 (up from CA$0.15 loss in FY 2020).
- Revenue: CA$150.7m (up 49% from FY 2020).
- Net income: CA$81.4m (up CA$131.5m from FY 2020).
- Profit margin: 54% (up from net loss in FY 2020).
- Share price is up ~200% over the past year.
Over the last 3 years on average, earnings per share has increased by 66% per year but the company’s share price has only increased by 53% per year, which means it is significantly lagging earnings growth. I guess it's gonna' take Q1 results to make this baby jump!
Looks like old bandito was right, no pop on earnings. I don't think it'll happen after Q1 either. I stick with my past comments that without a dividend it will lag the markets in general.. The evidence is clear between those returning capital to those that are not.
I wish they would have just announced the expected date of implementation and expected distribution. If it's only .05/year then It's going to be stuck around .90 to a buck for a yield of around 5-5.5%. Maybe less for a 6% yield which seems to have been a historical norm for oil and gas producers in a past life. Something like that.
Like it or not dividend stocks are usually priced by yield not share price. Believe it or not a company can be forced to raise a dividend to entice investor interest. If the yield is too low especially with inflation at 7%, then the share price drops to achieve desired and acceptable yield or people search for more than a token safe yield of say, 3% or the company paying the dividend is forced to raise a dividend to maintain a market acceptable yield. A company can also be forced to cut a dividend and happens when a share price drops to make the yield out of whack with market peers. Investors see this as there is something wrong with the company and the market is usually right in this regard as we have seen in oil and gas stocks and was totally predictable since none could cover their dividends including BNE. They were being paid using debt which is never sustainable.
I am no expert but I have read an extensive volume of materials regarding dividends and then watched many companies over many years that pay dividends to see if what I read makes sense and holds true or not. Believe it or not, my own analysis in real world markets indicate this is exactly the way markets operate in terms of dividends.
Banks are a prime example. Historical yields are usually around 3.5%. Banks steadily raise dividends and investors know it. They know maybe they get a 3.5% yield maybe 4% on a good day but investors know they will also see capital gains so total return is larger than 3.5% or so beating inflation after taxes ( a litte bit tougher these days) or at least investors cash remains flat after taxes which is still ok. As long as your head remains above water that's the name of the game. I have bought TD many times and still hold it. My yield is very! good over time but I am always buying on yield not share price even the 2 go hand in hand. I've bought TD before when it was pushing 6%...meaning the market was crashing and it has been a good move every single time. Without fail.
I don't think the same would happen for PNE. I think when investors know what the payout is then the market will adjust to the yield it wants. A higher yield, in my opinion, will be expected for risk and since the market might not expect regular dividend increases.
I dont know if I explained this clearly or not...hopefully. I guess be careful what we wish for since once a company implements a divi then it is tough to escape the ramifications of doing so. After writing all of this, I see they may implement a low dividend to be cautious of the reasons I wrote above. They are not dumb and know exactly what paying a dividend means. I still say because o&G is so capital intensive, high risk, they're price takers, and exposed to a voliatile product they have zero control over that maybe a token dividend is the way to go but with full expectations of special dividends when warranted.
I have a stock called Evertz Technologies. A cash machine and this is exactly what they do usually every couple of years. It's been a wonderful friend to me. lol
Time will tell.