Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi MM Team, I am interested in purchasing Mayne Pharma Group (ASX: MYX) shares and noticed they announced a Return of Capital on 28th Oct. Being new to investing, may you please explain what a return of capital is. Also, what are your thoughts on MYX? Thanks in advance! Richard
Hi Richard,
In late October MYX declared they would pay a 3.8c unfranked dividend to shareholders on the 18th of January plus a 2.72c fully franked special return of capital on the same day, effectively its an extra dividend where the company is giving shareholders the benefits of franking credits on their balance sheet – the stock could easily drop ~6c on this day but of course shareholders will receive the 2 payments. It’s a capital return because it does not come from earnings whereas dividends are a pass through of earnings.
Pharmaceuticals company Mayne Pharma (MYX) has been trading sideways for a few years now hence its not on our radar at least this side of NYE.
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