10%+ Dividend payers for next year

[noodles]

Thought I would start a thread on the top dividend payers in 2015. To make the grade, they must make a gross dividend of over 10% and you must reasonably justify the forecast.

To calculate the imputation credit, use the following formula:
Imputation credit = 0.28 * ( Net Dividend / 0.72)
This is for a 100% imputed dividend

To calculate the gross yield:
(Net Dividend+ Imputation credit)/price*100

For historical net yields, you can go to this excellent site:
http://www.dividendyield.co.nz/hightolowdividend.php

To get the ball rolling, I've picked some of the stocks I own. I'm too lazy to do the whole NZX, so perhaps others can list the stocks they own that meet the criteria.

Stock
Price
Next Year Dividends
Imp Credits
Gross Yield
Source










NZE:PGW
0.44
0.0425
0.0165
13.42%
Analyst Forecasts


NZE:VIL
1.28
0.103
0.0401
11.18%
Guidance given at AGM. See post http://www.sharetrader.co.nz/showthread.php?9111-VIL-Veritas-Investments-Limited&p=523216&viewfull=1#post523216


NZE:SCL
1.44
0.11
0.0428
10.61%
Yield as per Prospectus PFI


NZE:GNE
2.09
0.16
0.0622
10.63%
Analyst Forecasts


NZE:HLG
3.14
0.26
0.1011
11.50%
Okebw: Analysts estimates with a few tweaks based on more recent data. Noodles notes that current analysts forecasts are .26


NZE:TTK
1.7
0.15
0.0583
12.25%
Management guidance at AGM


NZE:MVN
1.15
0.083
0.0323
10.02%
Analyst Forecasts


NZE:HBY
3.34
0.24375
0.0948
10.14%
Analyst Forecasts


















Honorable Mentions







Stock
Price
Next Year Dividends
Imp Credits
Gross Yield
Source


NZE:THL
1.78
0.1397
0.0272
9.37%
Bunter:NPAT 14 11.1m; div 14.1c
NPAT15 "at least 17m" - company's latest forecast.
So a 54% increase in NPAT.
Say they give half that to the shareholders - 27% increase in div


















EDIT: Added GNE, HLG,TTK, MVN, HBY,THL

[BFG]

MTHFC? Who are they and what do they do?

[Okebw]

MTHFC? Who are they and what do they do?

Motor trade finance preference shares

[skid]

Motor trade finance--pretty big investment though @$74 per share---(It would be interesting to compare charts on this list)

[BFG]

Motor trade finance--pretty big investment though @$74 per share---(It would be interesting to compare charts on this list)

$74 or 74 cents, matters very little where the decimal is placed if thestory is good and the trend is up!

[skid]

Whoops--beat me to it oke (you would think moosie would have enough energy to type in the share in the NZX box:eek2:)

[BFG]

Whoops--beat me to it oke (you would think moosie would have enough energy to type in the share in the NZX box:eek2:)
Just asking the question for those who are too lazy so you can get some more viewers on the stock skid ;)

[Okebw]

Stock
Price
Next Year Dividends
Imp Credits
Gross Yield
Source




HLG:
3.14
0.27
10.5
11.94%
Analysts estimates with a few tweaks based on more recent data

















I've got no clue how I ruined the formatting so much. I'll leave it as is and add to it if I think of anything else

[skid]

:) How does that saying go about teaching a man to fish:D

[noodles]

Motor trade finance--pretty big investment though @$74 per share---(It would be interesting to compare charts on this list)
It is just the way some debt instruments get quoted. When you buy the shares, use .74c as your unit cost. You will need to call your broker to buy. You can confirm with them as well.

[Okebw]

Thanks, HLG is an obvious one.


I'll post the workings at some stage, it's saved on my computer at work. You may be better to include it in the table at the analysts forecast level, just so no one gets the wrong idea and blames me by association

[noodles]

MTHFC? Who are they and what do they do?
Percy started a thread on this when they were 70c. Since then they have gone XD on their quarterly dividend.
http://www.sharetrader.co.nz/showthread.php?9988-Mtfhc&highlight=mtfhc

Percy, thanks again for the tip

[noodles]

I'll post the workings at some stage, it's saved on my computer at work. You may be better to include it in the table at the analysts forecast level, just so no one gets the wrong idea and blames me by association
done. But will be keen to see your workings

[noodles]

TTK added to the list above

http://www.sharetrader.co.nz/showthread.php?10063-10-Dividend-payers-for-next-year&p=523245&viewfull=1#post523245

[noodles]

MVN added to the list above

http://www.sharetrader.co.nz/showthr...l=1#post523245 (http://www.sharetrader.co.nz/showthread.php?10063-10-Dividend-payers-for-next-year&p=523245&viewfull=1#post523245)

I'm struggling to find any more stocks

[bunter]

1) NZO
If they resume paying divs at this year's rate (and they said they might...) - would give a 6c gross div.

Current share price = 60 c
Theoretical ex-price post capital return is 56.25c

Yield ex-return 10.67%

2) HBY
They're increasing their payout rate from 50% to 75%
Current gross div is 20.8c
Add 50%, gives 31.2c
Add 8% 'growth factor' gives 33.7c gross

Current share price is 334 - gross yield of 10.1%

A screaming buy IMO - HBY is acquiring other businesses on a lower PE than HBY's.

[noodles]

1) NZO
If they resume paying divs at this year's rate (and they said they might...) - would give a 6c gross div.

Current share price = 60 c
Theoretical ex-price post capital return is 56.25c

Yield ex-return 10.67%


From the recent AGM: https://www.nzx.com/companies/NZO/announcements/257203
"While our cash flows will be strong, the company is not in a tax-paying position. This is largely a consequence of New Zealand exploration expenses being immediately tax deductible. We are not generating imputation credits. Consequently the board does not expect to declare dividends for the near term."

I think you will need to be satisfied with your capital return (buy back) only.

[noodles]

1)
2) HBY
They're increasing their payout rate from 50% to 75%
Current gross div is 20.8c
Add 50%, gives 31.2c
Add 8% 'growth factor' gives 33.7c gross

Current share price is 334 - gross yield of 10.1%

A screaming buy IMO - HBY is acquiring other businesses on a lower PE than HBY's.

Agreed. I've updated the first post
http://www.sharetrader.co.nz/showthread.php?10063-10-Dividend-payers-for-next-year&p=523245&viewfull=1#post523245

[bunter]

From the recent AGM: https://www.nzx.com/companies/NZO/announcements/257203
"While our cash flows will be strong, the company is not in a tax-paying position. This is largely a consequence of New Zealand exploration expenses being immediately tax deductible. We are not generating imputation credits. Consequently the board does not expect to declare dividends for the near term."

I think you will need to be satisfied with your capital return (buy back) only.

NZO:14804

Knight said "The dividend is a board decision but peter did indicate that with available imputations the Board would consider paying a dividend again. depending on the Pateke timing and currency as the main factors, reducing exploration may put us into a tax paying position earlier than previously thought. it will remain uncertain i9n the short term (next few months) but should be clearer after that."

If near term = next few months, NZO might well pay a dividend next year. With reduced income (falling oil price) and reduced exploration (as disclosed) it's possible they could pay a similar div to this year's.

[bunter]

THL...
NPAT 14 11.1m; div 14.1c

NPAT15 "at least 17m" - company's latest forecast.

So a 54% increase in NPAT.

Say they give half that to the shareholders - 27% increase in div = 17.9c
Share price 1.78

Forecast yield 10.1% gross yield for the year ending 30/6/15.

Also... PGW gross div for this year was 7.64c.
If maintained that gives a 15 yield of 17.4%

The company forecast its profits to rise.

[noodles]

THL...
NPAT 14 11.1m; div 14.1c

NPAT15 "at least 17m" - company's latest forecast.

So a 54% increase in NPAT.

Say they give half that to the shareholders - 27% increase in div = 17.9c
Share price 1.78

Forecast yield 10.1% gross yield for the year ending 30/6/15.
THL is one that I own. I'm surprised that I missed it.
So last year they paid 11c. (5+6).
They also said " we expect a small increase in dividends for FY15"
and "Half year dividend expectations should remain in line with the FY14 year end dividend of 6 cents per share,however we will confirm that in February 2015. Long term we will aim to be consistent with dividends
whilst enabling enough funds to remain in the business for growth opportunities. "

These statements were of course before the recent upgrade of at least "at least 17mil".

So I think your argument that 50% of the increase could go to dividend is quite reasonable.

At the AGM they said dividend would be approx 50% imputed due to overseas income. This is consistent with the FY14 final dividend that was only imputed at a level of 50%.

So the net dividend would be .11*1.27=13.97c. At 50% imputation, that would give 2.72c worth of credits. At a share price of 1.78, that gives a gross yield of 9.37%

Not quite 10%, but worth an honorable mention.

EDIT: Personally, I think they will likely hit $18m NPAT as management have been conservative in the last year. They would definitely bump it over 10%.

[noodles]

Well this is embarrassing. I've had to remove MTFHC from the 10%+ list. I understood 6.25% was a net dividend. I was wrong. It is gross. Yield is actually about 8.5%!

[percy]

Well this is embarrassing. I've had to remove MTFHC from the 10%+ list. I understood 6.25% was a net dividend. I was wrong. It is gross. Yield is actually about 8.5%!

I thought the 6.25% was net.
I confirm from my dividend statement the gross is 8.50%.

[GR8DAY]

hi Noodles (and Percy)......excuse my ignorance on such matters but is the GROSS yield you are quoting the (gross) amount the SH receives.....to then pay personal tax on? Never bought for yield before so this is going to be interesting.

[GR8DAY]

.........and how do these imputation credits affect things, do all yield stocks carry them? Sounds like they vary a bit?

[Harvey Specter]

Todays Investor 301 is on imputation. For a fully imputed dividend:

$67 Cash (net Dividend)
$28 IC's
$ 5 RWT
100 Total (Gross) Dividend

$33 Tax on Gross dividend
(28) IC's received
( 5) RWT credits received
0 Tax to pay

Unimputed dividend

$45 Cash received (Net dividend)
$22 RWT withheld
$67 Gross dividend

$22 Tax on Gross dividend
(22) RWT credits received
0 Tax to pay

In both situations, the company has $67 dollars cash to distribute. The different results depend on whether there is any IC's avaliable to attached. In both situations, you should not have any further tax to pay.

[fungus pudding]

Todays Investor 101 is on imputation. For a fully imputed dividend:

$67 Cash (net Dividend)
$28 IC's
$ 5 RWT
100 Total (Gross) Dividend

$33 Tax on Gross dividend
(28) IC's received
( 5) RWT credits received
0 Tax to pay

Unimputed dividend

$45 Cash received (Net dividend)
$22 RWT withheld
$67 Gross dividend

$22 Tax on Gross dividend
(22) RWT credits received
0 Tax to pay

Yes, well.....if that's 101 I would hate to see any advanced course.

[BIRMANBOY]

This is a link to the IRD website and what they say about imputation credits and tax....http://www.ird.govt.nz/business-income-tax/imputation/imputation-basics/
.........and how do these imputation credits affect things, do all yield stocks carry them? Sounds like they vary a bit?

[Cricketfan]

In both situations, the company has $67 dollars cash to distribute. The different results depend on whether there is any IC's avaliable to attached. In both situations, you should not have any further tax to pay.

Thanks for adding this, it clears things up for me. I was always confused about why IC's matter to the shareholder because there's no further tax to pay whether it's IC's or RWT and it appeared the net dividend was the same regardless (my examples were based on the same gross dividend). But now I see that an imputed dividend means that the company can declare a higher gross dividend (and hence net dividend) for the same amount of cash.

[Harvey Specter]

Thanks for adding this, it clears things up for me. I was always confused about why IC's matter to the shareholder because there's no further tax to pay whether it's IC's or RWT and it appeared the net dividend was the same regardless (my examples were based on the same gross dividend). But now I see that an imputed dividend means that the company can declare a higher gross dividend (and hence net dividend) for the same amount of cash.Assume the company had profits of $100, on which tax of $28 dollars was paid. Those IC's reflect the tax paid by the company avoiding tax being double paid.

[samdaman]

I've learned before but what does a supplementary dividend mean to a SH such as shown on historical dividends on the nzx website?

[Harvey Specter]

I've learned before but what does a supplementary dividend mean to a SH such as shown on historical dividends on the nzx website?Only relevant for overseas shareholders (only paid to them).

Because they are overseas, the company has to withhold 'non residents withhold tax' (NRWT) of 15%, so the supplementary dividend just makes them whole (ie. they receive the same amount as a resident despite the NRWT). Its just very complex way of saying they dont have to withhold NRWT (only applies to the extent the dividend is imputed).

[samdaman]

That's right! Cheers :)

[bunter]

NZR.

Expected profit for the y.e. 31/12/14 is 3 cps.

For the y.e. 31/12/15, using the profit matrix here (http://www.refiningnz.com/media/92331/analyst_presentation_full_year_results_2013.pdf), and dividing by shares on issue gives the following EPS-AT table




ex rate

EPS matrix


margin $/bbl
70

75
80
85


4
0
0
0
0


5
10
6.7
4.5
0


6
19
16
13
10


7
28
24
21
17


8
39
38
33
29


9
47
42
37
32


10e
55
50

45

40




The company's latest margin and current exchange rate give the bolded figures - say 48cps.
Say NZR pays 75% as a dividend - makes 36c fully imputed.

Or 50c gross.
Share price 2.50

Gross dividend for the y.e. 31/12/15 is 20%.

Looking further out, the expansion Te Mahi Hou supposedly comes online in Dec 2015 and by NZR estimates will add 14cps to NPAT.

Given current margin and exchange rates, and 5% inherent growth in earnings:





30/12/14

15
16
17
18










EPS-AT
3.0

48.0
50.4
52.9
55.6


epsAT, TMH
0.0
0.0
14.0
14.7
15.4


total EPS-AT
0.0
48.0
64.4
67.6
71.0


DPS, net
0.0
36.0
48.3
50.7
53.3


Gross div yield
0%

20%
27%
28%
30%










Growth rate
5%






Div pmt rate
75%






Sh price
$ 2.50







These figures seem too good to be true. My model gives a value of 8.45.

NZR might not pay such a high percentage in dividends, given that it's spending so much on TMH.
This report (http://www.refiningnz.com/media/80573/refining_nz_growth_project_shareholder_presentatio n.pdf) forecast debt to peak at 240m in 2015.
Since then they raised 53m in new capital - so debt peaking at 190m?
TMH would almost pay for itself by 2018 - still leaves 50c gross for dividends.

NZR planned to pay off all debt by 2020, but maybe they'll run with some debt, given interest rates are low.

[bunter]

Better take TTK off that list - 11.11c gross forecast now; even at current SP of 1.20 it's not 10% any more.

[noodles]

Better take TTK off that list - 11.11c gross forecast now; even at current SP of 1.20 it's not 10% any more.

Share price has now fallen enough to go over 10% again. lol

[noodles]

Better take TTK off that list - 11.11c gross forecast now; even at current SP of 1.20 it's not 10% any more.
Actually, given the company has said they will make close zero profit, there may not be imputation credits attached to the 8c dividend. They had only 600K imputation credits in the last Annual report. Therefore, it may well be less than 10% gross now.

[noodles]

I guess the really interesting thing to know is, what companies are paying 10% truely sustainably, and not just smashing their balance sheets to do it?
Thus the importance of the cashflow statement

[bunter]

AWF (if 'next year' includes the year ending 31/3/16)


Net div to 30/9/14 - 7.2c (+12.5% on 30/9/13)
Net div to 31/3/15 - 8.55c (+12.5%) - estimated

Total to 31/3/15 15.75c fully imputed.

Looking at the y.e. 31/3/16, AWF announced yesterday that current year EBITDA was up around 50%, and underlying EPS up around 35%, and that they were expecting 'continued growth' from 'strong activity'.

So a further increase in div of 12% in the y.e. 31/3/2016 wouldn't be a surprise.

1.12* 15.75 / .72 / 2.42 = 10.12%, gross dividend on current share price of $2.42.

Caveat - they might raise capital soon to reduce debt.

[skid]

It seems (from skimming through posts) that the highest divi payers also have quite high debt.

[noodles]

It seems (from skimming through posts) that the highest divi payers also have quite high debt.
As a generalisation, I think it is true. However HLG have net cash and a 10%+ yield

[DarkHorse]

Just had a look at the Morningstar Summary ASB Securities provides: "HLG is repositioning Hallensteins to a more youthful, fashionable brand."
They're certainly not interested in middle-aged-farts like me! Went into the new Queen St shop a few weeks ago hoping to find some jeans, and the ONLY type they sell are those superskinny on the calf ones you never see on anyone much over 20...(found some great ones in JeansWest) . Didn't see any young guys in there though and can't see them becoming cool in a hurry

[noodles]

I have updated the table to reflect share price changes and new additions by bunter.

I have added a new column, 'Net Debt/ EBITDA'. This is a measure of financial leverage and can perhaps answer some of skids concerns. I struggled to quickly find the net debt of some of these stocks. Others are welcome to provide that info.


Stock
Price
Next Year Dividends
Imp Credits
Gross Yield
Net Debt / EBITDA
Source


NZE:PGW
0.49
0.0425
0.0165
12.05%
1.80
Analyst Forecasts


NZE:VIL
1.32
0.103
0.0401
10.84%
2.63
Guidance given at AGM. See post http://www.sharetrader.co.nz/showthread.php?9111-VIL-Veritas-Investments-Limited&p=523216&viewfull=1#post523216


NZE:AWF
2.44
0.1764
0.0686
10.04%
2.21
Bunter http://www.sharetrader.co.nz/showthread.php?10063-10-Dividend-payers-for-next-year&p=528314&viewfull=1#post528314


NZE:NZR
2.54
0.36
0.1400
19.69%
1.6 (analysts)
1.0 (bunter)
Bunter http://www.sharetrader.co.nz/showthread.php?10063-10-Dividend-payers-for-next-year&p=526679&viewfull=1#post526679


NZE:HLG
3.36
0.277
0.1077
11.45%
-0.01
Analyst Forecasts


NZE:TTK
0.93
0.08
0.0311
11.95%
2.40
Recent management guidance. Uncertainly remains over ability to pay fully imputed


NZE:HBY
3.17
0.24375
0.0948
10.68%
0.7
Analyst Forecasts











Honorable Mentions








Stock
Price
Next Year Dividends
Imp Credits
Gross Yield

Source


NZE:THL
1.8
0.1397
0.0272
9.27%
1.10
Bunter:NPAT 14 11.1m; div 14.1c
NPAT15 "at least 17m" - company's latest forecast.
So a 54% increase in NPAT.
Say they give half that to the shareholders - 27% increase in div


NZE:MTFHC
0.75
0.0451
0.0175
8.35%
?
Reset rate at 6.25% http://stocknessmonster.com/news-item?S=MTF&E=NZSE&N=255897


NZE:MVN
1.18
0.083
0.0323
9.77%
1.42
Analyst Forecasts


NZE:SCL
1.53
0.11
0.0428
9.99%
1.07
Yield as per Prospectus PFI


NZE:GNE
2.24
0.16
0.0622
9.92%
2.53
Analyst Forecasts



Disclosure: I'm holding SCL, VIL, HLG,THL, PGW, AWF. Even with all these stocks, I don't consider myself a dividend hound.

[bunter]

To be fair to me... I did mention both times that debt repayment might get in the way of dividends.

But it might not....

In AWF's case, they've signalled a possible capital raise. While this is giving with one hand and taking away with the other, it could be good for the share price in a dividend-hungry market, if it paves the way to larger and sustainable dividends.

A $12m capital raise (NBR article) would change the Debt:EBITDA ratio to approx 18:10 - or 1.8

Source table here...



Analysis
SP
Shares m






27/01/15
2.42
25.8







H2S
H2Me
FY15e
FY16e
FY17e
FY18e


'underlying' eps
0.134
0.126
0.260
0.291
0.326
0.365


dps
0.072
0.086
0.158
0.176
0.198
0.221


dps gross
0.100
0.119
0.219
0.245
0.274
0.307


DY


9.04%
10.12%
11.34%
12.70%


% payout
54%
68%
61%
61%
61%
61%


Debt reduction


2.64
2.96
3.32
3.72
























As for NZR - I struggle to work out 2015 EBITDA but note the following:

- Their profit matrix indicates 2015 NPAT of 50cps, so NPBT would be 70cps - or $220m (would it? will they pay tax? The accounts show a large 'deferred tax' figure.)

- If debt is $300m, interest might be $18m - though confusingly for me, 'finance cost' for the June 14 half were only 1.6m

- Depreciation was 71m in 2013.

EBITDA = 220+18+71 = 309m??

Debt:EBITDA ratio 300/238 of about 1?

[noodles]

As for NZR - I struggle to work out 2015 EBITDA but note the following:

- Their profit matrix indicates 2015 NPAT of 50cps, so NPBT would be 70cps - or $220m (would it? will they pay tax? The accounts show a large 'deferred tax' figure.)

- If debt is $300m, interest might be $18m - though confusingly for me, 'finance cost' for the June 14 half were only 1.6m

- Depreciation was 71m in 2013.

EBITDA = 220+18+71 = 309m??

Debt:EBITDA ratio 300/238 of about 1?
Bunter, I sourced my data from here: http://www.4-traders.com/THE-NEW-ZEALAND-REFINING-6492074/financials/
I used the 2014 estimate. I should have used 2015 (1.6 times).
These are from analyst forecasts. Analysts are often out of step with reality due to a time lag. So it may be the case that you are closer to the real Debt/EBITDA.

[Beagle]

I have updated the table to reflect share price changes and new additions by bunter.

I have added a new column, 'Net Debt/ EBITDA'. This is a measure of financial leverage and can perhaps answer some of skids concerns. I struggled to quickly find the net debt of some of these stocks. Others are welcome to provide that info.


Stock
Price
Next Year Dividends
Imp Credits
Gross Yield
Net Debt / EBITDA
Source


NZE:PGW
0.49
0.0425
0.0165
12.05%
1.80
Analyst Forecasts


NZE:VIL
1.32
0.103
0.0401
10.84%
2.63
Guidance given at AGM. See post http://www.sharetrader.co.nz/showthread.php?9111-VIL-Veritas-Investments-Limited&p=523216&viewfull=1#post523216


NZE:AWF
2.44
0.1764
0.0686
10.04%
2.21
Bunter http://www.sharetrader.co.nz/showthread.php?10063-10-Dividend-payers-for-next-year&p=528314&viewfull=1#post528314


NZE:NZR
2.54
0.36
0.1400
19.69%
1.6 (analysts)
1.0 (bunter)
Bunter http://www.sharetrader.co.nz/showthread.php?10063-10-Dividend-payers-for-next-year&p=526679&viewfull=1#post526679


NZE:HLG
3.36
0.277
0.1077
11.45%
-0.01
Analyst Forecasts


NZE:TTK
0.93
0.08
0.0311
11.95%
2.40
Recent management guidance. Uncertainly remains over ability to pay fully imputed


NZE:HBY
3.17
0.24375
0.0948
10.68%
0.7
Analyst Forecasts











Honorable Mentions








Stock
Price
Next Year Dividends
Imp Credits
Gross Yield

Source


NZE:THL
1.8
0.1397
0.0272
9.27%
1.10
Bunter:NPAT 14 11.1m; div 14.1c
NPAT15 "at least 17m" - company's latest forecast.
So a 54% increase in NPAT.
Say they give half that to the shareholders - 27% increase in div


NZE:MTFHC
0.75
0.0451
0.0175
8.35%
?
Reset rate at 6.25% http://stocknessmonster.com/news-item?S=MTF&E=NZSE&N=255897


NZE:MVN
1.18
0.083
0.0323
9.77%
1.42
Analyst Forecasts


NZE:SCL
1.53
0.11
0.0428
9.99%
1.07
Yield as per Prospectus PFI


NZE:GNE
2.24
0.16
0.0622
9.92%
2.53
Analyst Forecasts



Disclosure: I'm holding SCL, VIL, HLG,THL, PGW, AWF. Even with all these stocks, I don't consider myself a dividend hound.

:lol: I needed a bit of comedy to help start the week, thanks mate :)

[noodles]

NZR.

Expected profit for the y.e. 31/12/14 is 3 cps.

For the y.e. 31/12/15, using the profit matrix here (http://www.refiningnz.com/media/92331/analyst_presentation_full_year_results_2013.pdf), and dividing by shares on issue gives the following EPS-AT table




ex rate

EPS matrix


margin $/bbl
70

75
80
85


4
0
0
0
0


5
10
6.7
4.5
0


6
19
16
13
10


7
28
24
21
17


8
39
38
33
29


9
47
42
37
32


10e
55
50

45

40




The company's latest margin and current exchange rate give the bolded figures - say 48cps.
Say NZR pays 75% as a dividend - makes 36c fully imputed.

Or 50c gross.
Share price 2.50

Gross dividend for the y.e. 31/12/15 is 20%.

Looking further out, the expansion Te Mahi Hou supposedly comes online in Dec 2015 and by NZR estimates will add 14cps to NPAT.

Given current margin and exchange rates, and 5% inherent growth in earnings:





30/12/14

15
16
17
18










EPS-AT
3.0
48.0
50.4
52.9
55.6


epsAT, TMH
0.0
0.0
14.0
14.7
15.4


total EPS-AT
0.0
48.0
64.4
67.6
71.0


DPS, net
0.0
36.0
48.3
50.7
53.3


Gross div yield
0%

20%
27%
28%
30%










Growth rate
5%






Div pmt rate
75%






Sh price
$ 2.50







These figures seem too good to be true. My model gives a value of 8.45.

NZR might not pay such a high percentage in dividends, given that it's spending so much on TMH.
This report (http://www.refiningnz.com/media/80573/refining_nz_growth_project_shareholder_presentatio n.pdf) forecast debt to peak at 240m in 2015.
Since then they raised 53m in new capital - so debt peaking at 190m?
TMH would almost pay for itself by 2018 - still leaves 50c gross for dividends.

NZR planned to pay off all debt by 2020, but maybe they'll run with some debt, given interest rates are low.

Given the latest commentary by management, I think you are dreaming if you expect to see 36c dividend in FY15. Target dividend rate is 10-20%, not 75% as you are suggesting.
"Said Jackson: “The Company’s return to profitability represents a remarkable turnaround in 12months. However, we are conscious that year-end borrowings have pushed gearing to 33% whenour targeted ratio, outlined in the Company’s dividend policy, is 10-20%, and that further investmentis required to successfully complete TMH. Bearing this in mind, the Directors resolved to not pay afinal dividend to shareholders. As no interim dividend was paid, there is no dividend payment toshareholders this year.”"
https://www.nzx.com/files/attachments/208327.pdf

[tobo]

... However, we are conscious that year-end borrowings have pushed gearing to 33% when our targeted ratio, outlined in the Company’s dividend policy, is 10-20%, and that further investmentis required to successfully complete TMH. ...
I find that confusing.
It seems like he is saying gearing has been pushed to 33% when the targeted ratio is 10-20%
Is it the GEARING target that is 10-20%, not the dividend target?
Is he simply saying that targeted gearing ratio is outlined in the Dividend Policy?
But I cannot find the actual "Dividend Policy" to check the precise wording.

EDIT
Oh. I see snapiti confirmed that on the NZR thread.