Labrador Iron Ore Royalty Corp T.LIF

From Scotia this Morning

[savyinvestor333]

IOC Dividend a Positive Surprise
OUR TAKE: Positive.

LIF announced that it will receive an attributable Iron Ore Company of Canada (IOC) partner dividend of $73M, equal to $1.14 per share, payable on June 25. After paying out only one dividend last year (in December), IOC has already declared two partner dividends year to date. Given the unpredictability of IOC dividends, we had not anticipated any further payouts until Q4/21.
Although our annual estimates are unchanged, the earlier receipt of cash and resulting higher near-term anticipated dividends are a positive development. Moreover, we continue to see material upside risk to our current dividend expectations given still elevated Fe spot prices. Overall, we view the update as positive for the shares.

We rate LIF Sector Outperform based on relative valuation and our strong dividend outlook. Our 12-month target of C$45.00 per share is based on a 50/50 weighting of 12.0x our average 2021E-22E dividends and 1.3x our updated NAVPS(8%) estimate.

KEY POINTS Material upside risk to dividend outlook. Our revised 2021E-2023E CFPS estimates of $4.51, $3.12, and $2.29 (based on 62% Fe prices of US$142/t, US$100/t, and US $80/t) are unchanged. Similarly, we have made no changes to our forecast 2021E-2023E declared dividends per share of $4.40, $3.20, and $2.10, reflecting current yields of 10.1%, 7.3%, and 4.8%, respectively (vs. the shares' 3- year and 5- year historical yields of 10.8% and 10.0%). However, assuming current elevated spot prices for Q2-Q4 (62%/65% Fe prices of US$190/t and US$221/t; pellet premium of US $65/t; CAD of 0.83), we estimate a markedly higher 2021E CFPS of $6.83 (+52% above our estimate), suggesting a very compelling potential yield of ~15%. Alternatively, based on our 8% NAVPS, we estimate that LIF shares are currently implying a 62% Fe price of only US$76/t (or a 60% discount to spot and modestly above our long-term price of US $70/t) given the strong premium for high-grade products. We will formally review our Fe price assumptions in mid-J

[rockmstockm]

They haven't missed a dividend ever lol scotia is a joke Quoted scotia - Given the unpredictability of IOC dividends, we had not anticipated any further payouts until Q4/21.

[rockmstockm]

If iron ore prices were considered firm at this level LIF share price would be considered incredibly cheap but that depends on inflation and demand to hold or increase

[savyinvestor333]

IOC and LIF are 2 different entities. Last year IOC held the dividends to LIF for 2 or 3 quarters.

[ElanS2]

IOC  did not " hold the dividends to LIF " only . IOC has three owners one of which is RIO TINTO at over 50%. All three have suffered the hold. You can bet that RIO was not happy and made that felt by the board of IOC. IOC was purchased by RIO when RIO bought North in the late 90s. IOC was an unintentional part of that purchase as RIO was after North's Austrailian operations

[Kylemcc10]

Thanks for info 

[Kylemcc10]

What are they talking about. I had no respect for scotia as it is and that just confirmed it. They need to seriously check their info. 

[savyinvestor333]

You need to check your info IOC and LIF are 2 different entities

[Kylemcc10]

Gotcha