Ann: Half Year Results Analyst Presentation, page-108

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ddzx

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12/03/18

14:07

Post #: 31689391
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Originally posted by madamswer ↑

"oh dear... i was mistaken about the dividend, which makes CSL more overvalued for me"

Bit of a reflection of a lack of valuation theory literacy, I'm afraid.

The reason the dividend yield is so low, is because CSL retains most of its earnings in order to reinvest in the business.

And when a company generates ROE in well excess of 40%, which is a rate of return that almost no investors themselves would be able to achieve on a sustainable basis, then shareholders in such a company should really not want to received any dividends whatsoever, but should rather have a preference for the company to internally deploy all of the profits it generates.

So, therefore, CSL should really have a dividend yield o f 0%.

But, based on your logic of Lower Dividend Yield Equals Lower Value, that would make the stock totally worthless.

Expand

no dividend makes it less attractive

note: i never posted on this forum to downramp the stock. i am not that interested in arguing. if my short is a dud, so be it

all the best

CSL Price at posting: $166.41 Sentiment: None Disclosure: Not Held
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(20min delay)
Last $263.75		Change -0.205(0.08%)		Mkt cap ! $127.2B

Open	High	Low	Value	Volume
$264.45	$264.45	$259.33	$81.32M	309.9K

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No.	Vol.	Price($)
3	19	$263.73

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Price($)	Vol.	No.
$263.76	13	3

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No.	Vol.	Price($)
7	57	263.850
8	48	263.840
5	40	263.820
1	8	263.810
3	64	263.800

Price($)	Vol.	No.
263.890	32	4
263.900	7	2
263.910	30	2
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263.930	36	3

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Ann: Half Year Results Analyst Presentation, page-108

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Ann: Half Year Results Analyst Presentation, page-108

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