If you are recovering 20% of the current share price in franked dividends per year while this higher prices continue, and eventually some time in the future dividends drop back to say $2.00 per year, today’s share price looks very cheap.
If NPV is based on an average of $90 Iron ore, then the stock is worth minimum $28. But you can buy it now for $22 and recover probably $2.86 including franking credits in a few months and maybe another $2.86 six months after that.
Once those high dividends come to an end, and we are left with a stock worth $28 paying 10% including franking, we might only have a fraction of the $22 paid today left in the deal having recovered back a chunk of the purchase price through above market dividends.
If you are recovering 20% of the current share price in franked...
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Last
$25.66 |
Change
0.090(0.35%) |
Mkt cap ! $79.00B | |||
| Open | High | Low | Value | Volume |
| $25.72 | $25.86 | $25.63 | $77.37M | 3.012M |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 3 | 11417 | $25.65 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $25.70 | 2000 | 1 |
View Market Depth
| Last trade - 16.10pm 03/05/2024 (20 minute delay) ? |
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Last
$25.72 |
Change
0.090 ( 0.55 %) |
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| Open | High | Low | Volume | ||
| $25.72 | $25.86 | $25.64 | 785342 | ||
| Last updated 15.59pm 03/05/2024 ? | |||||
| FMG (ASX) Chart |