Are you assuming the dividend will be $2.20 in 2022?
I know it is what is forecast, but the uncertainty could mean dividend paid is $1.74 in 2022 now (brokers have a tendency to under forecast change).
I would factor in at least a 50% drop in dividend in 2022 ($1). The December FUM will fall to $93B or less after St James Place loss and management will need to retain more money to shore up the balance sheet, unless they liquidate holdings in Mexican takeaway, Finclear or Barren Joey.
The risk in this business is continued poor portfolio performance, increased loss of FUM and a decrease in fees charged. The EPS and dividends will drop if these events occur.
If the market does fall 25% tomorrow, then Magellan FUM will drop to $70B. What does this do to EPS and dividends?
Best of Luck Lost
MFG Price at posting:
$20.56 Sentiment: None Disclosure: Not Held
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