Frequently we see scepticism about the online analysts, which is understandable as they are essentially unidentifiable and probably only a computer algorithm, however some people choose to quote them when it suits their position and deride them when it doesn't.
So what do our bonafide FA guru's think of this? Interested in your thoughts. TIA
From 'Simply Wall Street'
Upcoming dividend of NZ$0.023 per share
Eligible shareholders must have bought the stock before 03 June 2022.
Payment date: 21 June 2022.
Payout ratio is a comfortable 51% but the company is not cash flow positive.
Trailing yield: 4.3%.
Lower than top quartile of New Zealander dividend payers (5.8%).
Higher than average of industry peers (2.4%).
How can you be cash flow positive when you are expanding your assets. Misleading using this metric as a guide to buy/sell/hold.
It would be better to use the funds to expand, rather than to pay unimputed dividends.
They are using funds to expand, other people's funds at low interest rates so let them keep paying a diivy, even unimputed divvies are okay if your on a lower tax rate cause you get tax back at the end of year and imputations often can't be used and are just carried forward.
It would be better to use the funds to expand, rather than to pay unimputed dividends.
Not going to be cash flow negative forever. Companies that stop start dividends never have a good SP history. This may be a it tricky, but dividends are being paid from cash flow profits, which may be different to taxable profits, due to various factors such as depreciation. Excess cash flow profits, borrowing and capital raises are used to fund asset expansion. I myself wouldn't mind temporarily ceasing dividends. Effectively this would raise NTA, but the SP is well below NTA, so shareholders would be disadvantaged in the short/medium term.
Looking at Oceania mainly as a property company and as such track key financials / metrics with this view makes it easier to see where value is being added. The care / village segmentation that Oceania uses to me adds little value and just complicates / confuses things.
Key source of tracking data is the Changes in Equity' statement and splitting the reported profit into a few key lines - Realised Gains on sales / Unrealised Gains with the balancing factor being what I call 'Operating Profit' which is essentially what's left out looking after people and running villages. Tracking Cash Burn and funding is also important.
So tracking Changes in Equity along with a few key metrics on the property side is nearly I need to see how things are going. Tells me what the company is worth (Book Value / Equity) and how well or not the property side is going.
The table is below. I've redacted future years forecasts so you don't know whether I see Oceania doing bad, OK or very well ..... and when the next capital raise is likely to happen (sorry)
Whatever I think this approach is good .... and if nothing else it proves to me that Underlying Earnings doesn't mean very much at all when it comes to seeing what Oceania is worth.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Looking at Oceania mainly as a property company....
....Whatever I think this approach is good .... and if nothing else it proves to me that Underlying Earnings doesn't mean very much at all when it comes to seeing what Oceania is worth.
That chart I posted the other day showing how the value of the companies in the retirement sector had grown over the last 5 years had SUM as best performer by far, RYM as OK and OCA ans ARV bottom of the table.
Interestingly it seems that this 'ranking' is tied to the strength of each company's Purpose Statement
A purpose statement gives the reason why a company exists, its “philosophical heartbeat”. A well-considered and clearly stated purpose ensures that everyone is paddling in the same direction, gives a sense of worthwhile work, and increases dynamism and innovation. It needs to be ambitious, actionable, inspirational, authentic, and simple but not simplistic. It should also be succinct and devoid of cliches. It then needs to be put at the core of a company’s strategy.
Here's the Purpose Statements of the four in the sector -
Summerset - Bring the best of life to our residents
Ryman - To provide the best of care for our residents in beautiful sustainable homes
Arvida - To enable a more fulfilling life as people age
Oceania -To reimagine the aged care and retirement living experience
All good stuff but to me the Oceania Purpose seems to lack the doing bit - reimagining maybe is inspirational but is it actionable (by all employees). I fear not.
Maybe it's culture per se that is holding Oceania back in company performance and stakeholder returns.
Post inspired by a recent NBR article which made me think a bit about Oceania and the others.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Originally Posted by Baa_Baa
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