Post by
SunsetGrill on Jun 29, 2021 9:39am
Starting to see advantage to lower divy run rates-Scotia $20
The advantages of the lower divy policy as a percent of cash flows will really start to kick in over the year(s) and you are seeing the tip of the iceberg in the DM investment. NOTICE they used 12M bucks from "cash generated from operations". While a somewhat small number that will continue to grow in future investments. You are basically now able to earn compounding cash from other investvents (ie 12M now earning 14% rather than having to borrow that 12M and pay the interest).
IF they maintain this policy (which I hope they do) you will see the stock price makes gains much higher and faster than any possible divy increases.. THe financial flexibility the company will now exihibit (compounded with Planet Fitness paying 100%) will make the street stand up and take notice which it did not due before; because the company simply paid out ALL their cashflow. Times have changed and so will the share price - good call by Mr King - I am expecting a 50% bump in share price over the next 1-2 yrs along with that 7.5% divy.
I will post Scotia analysis later today - maintained at $20.00 thay guy is a tuff nut to crack - they will likely upgrage after PFitness distribution announcement