GNE - Genesis Energy

[bull....]

http://www.stuff.co.nz/business/indu...g-legal-action

another failed company for jenny

[Master98]

http://www.stuff.co.nz/business/indu...g-legal-action

another failed company for jenny

she may not able to focus on Genesis business, step down some time?

[xafalcon]

With the current share price ($1.86) the F15 gross dividend yield is very high @ 9.35%. Imputation adds even more. So even if future dividends are not fully impututed, the yield is still high and should hold up or raise the SP once the silly season is past. I really don't think the difference between partial or full imputation is a big deal

Trying to understand/second-guess the oil market is beyond me. I know my petrol purchase price is only 10% lower than 12 month PCP. The oil NZ produces and refines is not directly comparable to the WTI we see quoted on the news each night. Refineries are constructed to primarily process a certain type of crude oil. And it appears that the huge extra quantities of WTI are driving the market price atm. So maybe the downward effect on price is less for NZ crude???

[Beagle]

Okay so perhaps it is time to have another look at the dividend yield. I'm far from certain they can maintain 16 cps in 2016 but if they can it'll be hard-out based on circa 100% of their cash flow not based on earnings. Estimating 60% available imputation credits the formula becomes 16 / .832 = 19.23 cps gross which on a closing SP of $1.88 (which appears to have been temporarily ? pumped up with MSCI index rebalancing), gives a gross dividend yield of 10.2%.

But can they maintain that 16 cps divvy with oil where it is and forward cover at attractive rates on oil sales running out ? Note also that 2H 2015 appears to be considerably weaker than 1H 2015 which doesn't bode well for FY16.

[tim23]

At $1.86 the yield is 8.6% net not 9.35% gross I'm comfortable holding the income is simply compelling even if dividend drops slightly and I think that's already factored in to the share price.

[xafalcon]

Who would have though NZ inflation would be running below 1%. Interest rates look like they could fall further, definately won't be rising. Pay rises are generally 2-4% for those who get one at all. Net population loss to Aussie is almost zero. Hard and soft commodities are trading at multi-year lows. Auckland house prices are caught in an invester frenzy that will end in tears for those who jump aboard just before the inevitable correction. We are living in a NZ (and a world) like we haven't known before. Throw in the Fed interest rate uncertainty, which is indirectly linked back to the performance of the world economy, and the picture becomes even more unclear.

In this low return environment (except for Auckland houses atm) in my opinion a 10% gross return on a passive investment with tangible asset backing sounds pretty good to me. If it falls to 8% next year, it still sounds good. At 6% I would look elsewhere.

This is just how I assess an investment, by comparing it to other investments. I'm not saying this approach is right and others are wrong. But I believe current SP and dividend yield is tough to beat elsewhere. Maybe futures are worth a look???

[xafalcon]

At $1.86 the yield is 8.6% net not 9.35% gross I'm comfortable holding the income is simply compelling even if dividend drops slightly and I think that's already factored in to the share price.

8cps + 8cps + 1.4cps = 17.4cps / 186 = 9.35% gross. And like I said above, imputation adds even more

I speak of gross because there is uncertainty raised by Roger about future levels of dividend imputation, and net also requires differential tax calculation to account for varying company v's personal tax rates for many small investors

[Master98]

8cps + 8cps + 1.4cps = 17.4cps / 186 = 9.35% gross. And like I said above, imputation adds even more

I speak of gross because there is uncertainty raised by Roger about future levels of dividend imputation, and net also requires differential tax calculation to account for varying company v's personal tax rates for many small investors

i use my calculator GNE gross dividend is 22.2cps(FY2015),at $1.86 gross yield is 11.9%, please correct me.

[fish]

i use my calculator GNE gross dividend is 22.2cps(FY2015),at $1.86 gross yield is 11.9%, please correct me.

It just seems a no brainer.
On the asb website yesterday was an upgrade to a buy recommendation from Morningstar.
It has a wide "economic moat" and the future looks good.
We look as if we have growing demand for electricity.
Old thermal plants continue to be closed.
Sure we will slowly get more solar but no major generation plants planned.
Having quality assets the value of which should keep pace with inflation plus 10% return.
My nibbling turned into a bigger bite yesterday.
I think I may invest some of the big bonus extra dividend from contact coming soon.

[Sideshow Bob]

Isn't Morningstar a contrarian indicator? Eg their buy means sell?