Hi Joe, personally I agree with your view that the latest dividend was too high, and not just because I had been reducing my holdings into the strong share price resulting in a lower cash payment for myself.
Given the company's growth costs and debt levels my view is that free cash flow is better utilised by growing the company through expansion of their orchards and/or replacement of the older orchards.
As Western Australia has shown us, this is not a good thing to be debt funded.
I believe a more conservative payout ratio of 40 to 50% of normalised earnings is appropriate for a growth stock such as SHV. The payout ratio for last financial year was 60%
They also need to be mindful of the agricultural and meteorological risk when determining the dividend amount.
I'm okay with their H2E and Parboil projects as these have the effect of reducing costs for SHV as long as they don't go over budget.
California Weather, page-24
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Last
$3.54 |
Change
0.040(1.14%) |
Mkt cap ! $486.0M | |||
| Open | High | Low | Value | Volume |
| $3.50 | $3.56 | $3.42 | $1.346M | 383.5K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 3 | 3849 | $3.51 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $3.54 | 2100 | 1 |
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| Last trade - 16.10pm 04/10/2024 (20 minute delay) ? |
| SHV (ASX) Chart |