I don't think it's anything to worry about. The buy-back will almost certainly be approved IMO, so in the next few months WPL is suddenly going to find itself with about 10% fewer shares on the register. Earnings, dividends and yield will all go up 10%, and WPL has confirmed they will continue paying out 80% of underlying earnings, which will be substantial, with Pluto chugging along and this Iraq stuff going on which has given a (small) boost to the oil price. WPL's LNG contracts are still oil-linked so I think earnings may surprise slightly to the upside anyway, even before the buy-back takes effect.
In addition, the overhang is now gone, and regardless of whether you think this makes WPL a takeover target, it certainly doesn't make them LESS of a target - it is either positive or has no effect.
So I think in the next few weeks to months, we'll see the SP trend up to make back that 5% and then up at least another 5%, possibly 10%. Trailing yield is now 6.6% as of yesterday's close (including one special div), which after the buy-back will be 7.2% fully franked - absolutely insane yield for a blue chip oiler.
Even without the special div it's 5.6% post buy-back. With 80% payout ratio going forward I don't really see WPL staying at these levels going forward.
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Last
$26.87 |
Change
-0.270(0.99%) |
Mkt cap ! $50.73B |
Open | High | Low | Value | Volume |
$26.90 | $26.98 | $26.70 | $103.2M | 3.844M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
3 | 4587 | $26.87 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$26.88 | 2193 | 1 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
3 | 4587 | 26.870 |
6 | 27662 | 26.860 |
9 | 7140 | 26.850 |
4 | 11187 | 26.840 |
9 | 30462 | 26.830 |
Price($) | Vol. | No. |
---|---|---|
26.880 | 2193 | 1 |
26.890 | 7524 | 1 |
26.900 | 24774 | 2 |
26.910 | 6186 | 2 |
26.920 | 4780 | 2 |
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