RBD - Restaurant Brands

[h2so4]

=winner69;312160]Maybe acid man and sauce need not worry about growth .... its dividends that make people rich

All part of the spin to make more millions targeting retireres and pensioners while the young recuperate their losses from the last round of high-risk rapid growth investments.

Na mate ...I've been around too long, (well long enough to know).

[h2so4]

I see PWC currently have WACC for RBD at 7.6%

I was using a higher value when I mentioned a $3 shareprice earlier .... at a 8% cost of capital you get a valuation of $3.40-$3.50

Obviously the market (gurus) have doubts about these record margins being maintained into the future

Don't these statements contradict each other?

I'm confused here winner.

[winner69]

Don't these statements contradict each other?

I'm confused here winner.

No

The 'valuation' of $3.40-$3.50 based on forecasted 2011 earnings whcih implies that the high margins (relative to previous years) will continue forever

If margins are more 'normal' (historical levels) than the 'valuation' falls .... and as the market price is $2.30-$2.40 the market probably not convinced the current high margins will continue.

[h2so4]

No

The 'valuation' of $3.40-$3.50 based on forecasted 2011 earnings whcih implies that the high margins (relative to previous years) will continue forever

If margins are more 'normal' (historical levels) than the 'valuation' falls .... and as the market price is $2.30-$2.40 the market probably not convinced the current high margins will continue.

Got it...........thanks mate.

[Snoopy]

I see PWC currently have WACC for RBD at 7.6%
I was using a higher value when I mentioned a $3 shareprice earlier .... at a 8% cost of capital you get a valuation of $3.40-$3.50

Winner:
1/ If the WACC is 7.6%, and
2/ RBD is able to renegotiate its banking facilities so that they pay no more than 7.6% interest. and
3/ if the dividend yield is greater than 7.6% (which I think it will be), then

If you do a present value calculation on the future value of RBD dividends, you will get positive returns as far out into the future as you can see. That implies there is no price you can pay for RBD shares that is too high. I would submit that the PWC WACC of 7.6% cannot be right.

SNOOPY

[winner69]

Winner:
1/ If the WACC is 7.6%, and
2/ RBD is able to renegotiate its banking facilities so that they pay no more than 7.6% interest. and
3/ if the dividend yield is greater than 7.6% (which I think it will be), then

If you do a present value calculation on the future value of RBD dividends, you will get positive returns as far out into the future as you can see. That implies there is no price you can pay for RBD shares that is too high. I would submit that the PWC WACC of 7.6% cannot be right.

SNOOPY

Sorry Snoopy .... I can't fathom what your are getting at ..... esp how 3) relates to 1) and 2)

[h2so4]

The suppliers aren't dumb. They'll be upping their prices as GFC becomes a thing of the past. Employees will become harder to come by and they'll cost more to find and retain.

I don't believe there's any chance of these margins being maintaned for much longer.

The last time I was in business these costs were past on.. They called it inflation. What do they call it now shrinkage?

[BRICKS]

THE LEVEN KFC is now open for BIZ & EATS this will add 1 million to the turnover so you lot can start counting the money and let know whats in it for BRICKS..

[Snoopy]

thanks SNOOPY are there any other global giant companies one should have in a long term hold portfolio.

If you are subject to a 1.5% overseas investment wealth tax (thanks to the FIF regime) plus a 1% management fee from your broker for holding a foreign share via a portfolio management entity, that means your overseas investment must outperform your NZ/Oz investment by 2.5% per year just to be an an even footing (after tax). I don't pay an ongoing management fee on my YUM shares because I hold them directly. If I want to sell quickly, I might have some problems though. It is pretty difficult to find an overseas share with as good a prospects as YUM. I invest in minerals by holding BHP and having a finger in one of those big four Ozzie banks looks like a no brainer. Otherwise you can invest overseas by investing in NZ companies that predominantly trade overseas.

SNOOPY

[voltage]

thanks snoopy, i hold some overseas shares via custodial which cost $50 each per year. If you can find companies that pay a high dividend, greater than 5%, this will limit FIF.