RE:RE:RE:RE:RE:RE:RE:RE:RE:Time to man up.. Dig inThat 1:1 debt to annualized FFO ratio target that YGR always mentions, just means that at that point in time the debt level really becomes a non-issue - because they now have sooo much more money coming in that, if they wanted to they could just pay off all their remaining debt in less than a year. But why the hurry? Unless their interest rate on that debt suddenly sky rockets past 19% per year, it is still way more profitable to just slowly paid it down and continue to benefit from the leverage effect. (Their annualized return on capital employed was 19.1%, but the cost of the capital from the debt portion was only 4.9% of annualized interest as of their 2022 q1 report)
It's pretty clearly stated how they arrive at that ratio in their MD&A reports. And here is how it has been going for them lately:
2021 q3 was at 2.1 debt : 1 FFO (annualized)
2021 q4 was at 1.5 debt : 1 FFO (annualized)
2022 q1 was at 1.1 debt : 1 FFO (annualized)
At that rate, I am certain that they have achieved their 1:1 target already. Now, we'll finally get to reap the rewards with a significant stock price re-rating (due to the dividends turning lots of heads, and of course from scorching the shorts).
fullyautomatic wrote: I'm positive a ratio for div vs debt hasn't been disclosed.
In fact I'm not even sure I understand the statment in the slide... Its says something like: when debt is 1:1 on a quaterly basis FCF to be used for divs and debt...
Honestly I don't know what that means..
Hungus- I just picked an even .02 cents a month and worked out from there to illustrate costs and impacts
All I am trying to communicate is please don't buy this stock expecting big dividends. I don't think it's in the cards.
By all means buy the stock and expect a double on the current SP