ddr distribute the earning of the year as divs, because finals are distributed in the next fy, so they are accounted as the first divs of next fys in reports, but the the money is still from what they earn in current fy. so how could they pull in increase for the final before they know what the final is? they can only distribute what they have earned, equal or less
it's not difficult to understand, last year they made 33.95c earning per share, so we got 7.5 x 3 + 10.5, if they still set 10% growth earning per share as the target, then that means their fy21 eps target is around 37.3c, 37.3 / 4 ~= 9.3c, that's where 9c is from, if ddr is just on target, then we get around 9.3c as the final (they may reserve some profit). we know ddr always exceed the target, but it's only q1 so far
this is the same logic they made 7.5c as the interim divs last year, because fy19 eps from normal operation was 28.31c, 28.31 x 1.1 / 4 ~= 7.8c, and i believe i explained this too in older threads.
i dont even know how they could give 9c as q1 div, 9c fully franked means 12.86c before tax, times all shares, that's more than what q1 before tax profit is, so maybe they will have to take some cash out of bank, this will raise some cashflow risk understandable when the boss not getting salaries but rely on the divs as income and want to get money, but the coo and cfo should remind him the vulnerability of this stragtegy. i'm not a financial related worker or a pro trader, but if i could tell where the problem is, surely the pros (including the shorters & big $$$) do better. he's 68 and what's the point if he gets some small cash but cannot sell his shares at a good price (assuming he will sell eventually)? he always gives me the impression 'im rich i dont care', that hurts the investors.
well, you can tell, im quite disappointed on ddr. my comments are all based on my understanding the number crunching, however, it's always dangerous when investing without doing homeworks, it's always dangerous that only looking at the positive side.
dyor, i 100% agree.
DDR Price at posting:
$9.30 Sentiment: Hold Disclosure: Held
