It shouldn’t really make much difference to the dividend payment unless I am missing something. If they pay out a dividend, share price should decrease by dividend amount.
So if they pay out big dividends over the next few years shareholders get the benefit of dividend cash flows, but share price resets at every payment and the dilution impact down the track may not be severe.
if they don’t pay dividends and accumulate cash, then shareholders should in theory get a much higher share price (equivalent to the cash retained ) and can sell if they want to realise cash benefit. In this case dilution will be higher on conversion, but share price in theory should be significantly higher also.
NHC Price at posting:
$1.70 Sentiment: Buy Disclosure: Held
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