Hi Luciano, I think most investors would appreciate a constant annual stream of dividends at some stage, however I believe as per Simons comments that the dividend stream will only be provided once they implement their growth plans and build up a healthy amount of franking credits.
They have ambitions of using capital for growth which would mean moving from Stage 1-2 and possibly 3 and then the possibility of battery grade product (down streaming). There is also chat about purchasing (diversifying) assets.
So whilst this growth phase is occurring the chance to pay dividends is low on the agenda as the money would be required to fuel the growth. Once the company has established the above and making a constant stream of earnings it can then implement a 50-60% dividend payout policy.
If the SP grows from 50s to over $4.0 over the next 3-4 yrs. Will we complain. There are some companies that don’t pay dividends by principal and just continue to grow their market cap as they believe the return they can generate is higher than their WACC. Such as Berkshire Hathaways (Buffets company) or CSL or cochlear which have a low dividend policy.
Look don’t get me wrong I would love to be earning a dividend every year. And if the company can generate excess profits they may be able to provide a dividend 10-20% payout in the growth phase but it won’t be a priority for them.
I own Santos Energy and it had been paying very little in dividends but as of this year has started to increase its payout policy.
LLL Price at posting:
53.5¢ Sentiment: Buy Disclosure: Held
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