This is how I think of CARD. Collect dividend while you wait for valuation to reach precovid levels. Valuation around PE ~11-14x or div yield of ~2.7-4.8% (2017-2019).
Which is around a 100% increase from the current PE of ~6x and a theoretical div yield of ~5.5-8%.
This is how I came up with my dividend numbers.
They stated in their 2023 annual report, "the Board envisages recommencing dividend payments at a level of 2-3x dividend cover based on profit after tax, subject to a Leverage ratio assessed across the financial year of not more than 1.5x (excluding lease liabilities) being maintained after the distribution is made."
Net Income LTM ~ $66 million
$411 million market cap
3x-2x Dividend Cover = ~ $22 million dividend - $33 million dividend, 22/411 - 33/411 5.4% - 8% div yield.
This to me is also conservative as I expect FY24 net income to be higher than LTM.
Good analysis. I have similar thinking altho. I think dividends will be higher. I think they wil do the normal dividend and then pay out a special one as well. I have no clue what else they would do with the cash.
Any idea when (i.e., the date that) Management will re-initiate the ~30 million annual dividend? For instance, have there been any hints from the CEO or in press releases?
What a disappointment today has been, cannot get my head around an 11% drop on great results and just wish I had more money to invest at these bargain prices!
Interesting business and great write-up! I really liked the simplicity of your valuation approach👍. I've featured a link to this post in my latest Friday Roundup, where I share interesting articles and insights from the week.
This is how I think of CARD. Collect dividend while you wait for valuation to reach precovid levels. Valuation around PE ~11-14x or div yield of ~2.7-4.8% (2017-2019).
Which is around a 100% increase from the current PE of ~6x and a theoretical div yield of ~5.5-8%.
This is how I came up with my dividend numbers.
They stated in their 2023 annual report, "the Board envisages recommencing dividend payments at a level of 2-3x dividend cover based on profit after tax, subject to a Leverage ratio assessed across the financial year of not more than 1.5x (excluding lease liabilities) being maintained after the distribution is made."
Net Income LTM ~ $66 million
$411 million market cap
3x-2x Dividend Cover = ~ $22 million dividend - $33 million dividend, 22/411 - 33/411 5.4% - 8% div yield.
This to me is also conservative as I expect FY24 net income to be higher than LTM.
Good analysis. I have similar thinking altho. I think dividends will be higher. I think they wil do the normal dividend and then pay out a special one as well. I have no clue what else they would do with the cash.
Great research and article Iggy
It helps I can have ur quotes do the heavy lifting.
Any idea when (i.e., the date that) Management will re-initiate the ~30 million annual dividend? For instance, have there been any hints from the CEO or in press releases?
Jan-Feb 2024
Can you link where the Management mentioned that? Thanks!
What a disappointment today has been, cannot get my head around an 11% drop on great results and just wish I had more money to invest at these bargain prices!
Same it's already so large a position for me I cannot keep adding, but it's so cheap.
Interesting business and great write-up! I really liked the simplicity of your valuation approach👍. I've featured a link to this post in my latest Friday Roundup, where I share interesting articles and insights from the week.
https://open.substack.com/pub/rhinoinsight/p/the-friday-roundup-cd2?r=2587ts&utm_campaign=post&utm_medium=web