Perhaps this merger may not be too back for existing AXY shareholders. Innergex is a larger company in market capitalization and production. Additionally, if Innergex can continue their dividend of $0.66 CAD, currently a 4.49% yield on the $14.25 CAD stock price, then AXY shareholders could have a significant increase in yield with what appears to be a stable stock.
The numbers below are in CAD $...and assume that INE will continue paying the dividend.
AXY Dividend | 0.05 | 0.66 | | | | | | | |
AXY Stock Price Pre-Acquisition | 5.08 | 14.25 | | | | | | | |
AXY Yield | 0.984% | 4.632% | | | | | | | |
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AXY Stock | 100 | | | | | | | | |
Conversion to INE | 0.5563 | all stock (otherwise you can receive $2.06 in cash on 0.4172 in INE stock) | |
New INE Stock | 55.63 | | | | | | | | |
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INE Dividend | $ 0.66 | | | | | | | | |
New Annual Dividend | $ 36.72 | Old AXY Annual Dividend $5.00 | | | | |
New Dividend Yield | 7.23% | Based On AXY Stock Price Pre-Acquisition | | | |
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But it gets better if you look at your cost basis for the yield instead of the market value. If you have a stock cost basis of $4.00 or below look at the dividend yield.
AXY Dividend | 0.05 | 0.66 | | | | | | |
AXY Cost Basis | 4.00 | 14.25 | | | | | | |
AXY Yield | 1.250% | 4.632% | | | | | | |
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AXY Stock | 100 | | | | | | | |
Conversion to INE | 0.5563 | all stock (otherwise you can receive $2.06 in cash on 0.4172 in INE stock) |
New INE Stock | 55.63 | | | | | | | |
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INE Dividend | $ 0.66 | | | | | | | |
New Annual Dividend | $ 36.72 | Old AXY Annual Dividend $5.00 | | | |
New Dividend Yield | 9.18% | Based On AXY Stock Price Pre-Acquisition | | |
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Please review my calculations. I still need to research INE’s management, financials, etc. I just haven’t had the time…
Bold Forbes