currently, TLS has a good yield but the $64K question is how...

currently, TLS has a good yield but the $64K question is how long can they keep this up?

FY12 EPS = 27.5 cents

FY12 dividends paid = 28 cents

FY12 dividend payout ratio = 102%

TLS must borrow to pay their dividend

blue-chip norm is a 65% to 70% payout ratio, thus TLS, if following commercial norm, should be paying a 19 cent dividend, which would yield 6.8% before tax on a $4.00 share price

will future earnings rise or fall? if fall, TLS seems fully valued based on dividend cut risk at $4.00

balance sheet has:

$4b in cash
$17b in borrowings & derivatives
$12b in net assets
$7b in intangibles
$20b in plant & equipment, who knows what it is really worth?
$4b in annual capital expenditure
$5b in gross cash flow
$3.4b in repayment of borrowings & interest
$3.5b in dividend payments
$2b in cash flow shortfall
$3b in borrowings

thus, $3b must be borrowed to pay a $3.5b dividend, it seems

i am not a financial analyst but, to me, it has the flavour of a Ponzi scheme

all the best