Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi, What is your estimated divdend for PLS after their announcement. Clearly of interest given their significant cash generation. How does it compare with similar companies at a similar stage of development? Should we hold for future yield? Keep up the good work, Shawn's Education Seminar was great. All the best.
Hi Alan,
Firstly, thanks for the feedback around Education – great to hear. At MM we simply want to create a great environment / platform where investors can get solid information & insight that leverages what we see in the markets now, while applying our experience of actively investing & managing funds over the past 20-30 years.
Now to Pilbara (PLS), they announced targeted dividend payout ratio of 20-30% of free cash flow, which is reflecting the early stages of the company’s growth cycle. We would expect they’ll pay at the top end of that which implies a dividend in FY23 of ~34c putting it on a yield of ~6%.
We like this story longer term, and the dividend only supports that view. We’re a little more 50/50 short term given how crowded this trade is, hence our move to trim (but not sell) IGO in the flagship Growth Portfolio. We would get keen on PLS again ~10% lower.
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