The Metric of Six., page-30

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allaussie

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25/01/17

23:38

Post #: 22146803
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Originally posted by steve4377 ↑

Allaussie- my article was related to my purchase of Dividend Stocks. I am well aware that Berkshire Hathaway does not pay divs, hence the heavy stock price. But it has zero relevance to my posting.

My maths are formed on this synopsis. Spo was oversold. Spo was making NPAT around $140 mil and then $120 mil last year. The divs are paid around 70 percent of NPAT. Last year around $20 mil or so was written off to nefarious one off reasons - read the annual report, they are clearly identified. The laundry business is only 10 percent of revenues and has heavy set up costs, clearly described as one offs. No major contracts expire this year.
The six new businesses are stated to be earning accretive this financial year on. As I said if the company is well run then I expect NPAT to be in the area of $180 mil this year, meaning a total div of 70 percent being about $130 million, meaning a total div of maybe 14 cents total (7 cents each half year). I also see major growth in divs and share price next few years as the young company matures. All of this is from existing business and not including new work that I suppose on average they must win a share of. I can see no reason why NPAT shouldn't grow towards 4 or 5 hundred million in the next five years. If they pay around 14 cents this year, then that starts to put them competitive with 3 to 5 dollars share peers, thus my bullish view of their share price future...

Goodly wishes to all...

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Then why did you include CSL as a "dividend" stock? Surely an armchair expert such as yourself would know most of their profits are directed in growth through R&D and share buybacks?

SPO Price at posting: 98.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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The Metric of Six., page-30

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