Originally Posted by
BlackPeter
Isn't another key bit that its not unheard of that MorningStar gets it wrong?
Sure, you can't rely on that either ... but anybody promising a sustainable dividend over several years in an industry so dependant on economic cycles, fuel prices low, (pilots, ground staff, air controller, border control staff) strikes (or the lack thereof), terrorists playing it nicely, war parties not taking down civil planes, viruses stopping to mutate, pilots controlling their mental illnesses, volcanoes remaining calm must have a truly amazing crystal ball!
In the last seven years AIR had only three years (the last three) where EPS was above 20 cents (which would be sort of a minimum requirement for a sustainable dividend of 2-0 cents pa):
2016 41 cts
2015 29 cts
2014 24 cts
2013 17 cts
2012 7 cts
2011 8 cts
2010 8 cts
OK - so, this is a cyclical industry, competition is heating up, AIR have no moat whatsoever, major cost factors (fuel) are outside of their control as is the demand (which goes off the discretionary budget of most travellers). And MorningStar claims that they will be able to sustain-ably pay a dividend which is higher than the average EPS over the last 7 years?
Hmm ...