CANEXUS CORP 6.5 PCT DEBS T.CUS.DB.D

Payout Ratio

[Kherson]

Bluecollar, you are talking Cash Payout Ratio while I am talking Payout Ratio. Your cash numbers are correct, but my numbers also include the 3 million shares issued under the DRIP since March 24, 2014...
There are no free lunches with a DRIP program for either the company or the long term shareholders when the Payout Ratios are high coupled with a falling share price due to the share dilution of issuing new shares...
Kherson

[BlueCollar51]

You stated that they “Borrowed” over $40.m to pay the dividends in the last 4 quarters which is BS. They “Borrowed” $30.4m to pay the cash dividends.   The shares issued for the DRIP are NOT a cash expense. They are EQUITY created out of thin air (dilutive) NOT “Borrowed”.   As Always. Do Your Own Due Diligence; It’s Your Money !!

[Jackroy]

I agree Kherson, but in the interim going on the Drip program for an investor is a prudent strategy. The typical investor has lost money on this stock so dollar cost averaging from treasury is a legitimate as buying in the market. True the company is diluting, but they also are getting the needed capital cheap.

[Kherson]

The problem Jackroy is that the needed capital (cash) is being used to pay dividends. That is in no way actually benefitable to Canexus's bottom line. The dividend in shares, in this case because both payout ratios are so high, is reducing the NAV per share. What Canexus needs to do now is to reduce the dividend to where the overall Payout Ratio remains under 100%. If Canexus

[Jackroy]

I agree. And I think they probably will reduce the dividend and they probably should in this climate - no one would blame them. In the meantime, I will still take the DrIP

[Calgaryrider]

I'll buy at $1.50 when they cut the dividend.....much too later.

[Ubervak]

You'll be waiting a long time to get that order filled.. - Uber