Post dividend, page-4

Morning guys,

It'll be an interesting day given the FOMC just went all dove like and against MSM expectations (but exactly to plan if you read commentators on ZH, Grant Williams, many Real Vision interviewees) ...

GDXJ is up 7.3% since the event.

Gold is up in USD but due to weak fx is down in AUD and stable in BRL. Recent history has shown that the market is ignoring the solid POG moves (up) in the currencies that matter to BDR (and it's Australian investors) and focus on the USD POG and overall market sentiment.

If recent history holds then hang on the for the ride today.

Womble67 - As you are probably aware once the dividend is paid the SP usually drops by a roughly equal amount to the cash that leaves the company. However, for a company to pay a dividend it normally means that it is cash flow positive and that cash is replenished quickly, thus the SP will respond upwards given time and all else being equal.

In BDR's case I believe the dividend is unfranked (correct me if wrong guys) and thus, as an Australian investor you'll need to pay tax on the cash received (not a turn-off for me as a NZ'er as we don't get access to the franking credits anyway).

This makes BDR less attractive for Aussie's as a yield investment relative to other sector participants such as NST or MLX whose dividends are franked. However, I am leaning towards a dividend surprise in 2H of another 1c to make a 2c annual payout per share ... that'll get people's attention if it eventuates.

As you'll read however, most of the boys here aren't that interested in the dividend, more the capital gains. I lean the other way in that it is an important part of capital management. Additionally:

(a) it generates good research notes like the recent Citi note
(b) it deters shorters as they have to cover the dividend payment as part of 'borrowing' stock
(c) it attracts people like me that hold relatively large parcels for a relatively long time, that in turn reduces the free float.

Cheers
John