CDL & CDI ... Another Great Result

[Vaygor1]

Hi Forest.

I am interested in your view re CDI's dividends in lieu of cash scheme.

It appears the majority of shareholders (or at least a few of the big ones) are opted-in to this scheme so unless I am opted in too, my percentage shareholding dilutes every year unless I purchase more on the market to make up for it. Do you concur?

What if CDI were to instead retain all its earnings and pay no dividend at all? My perception is the current method of opting in or not means that the income (either in dividends or shares) is taxable but if CDI adopted a no-dividend-and-retain-all-earnings policy, then all (or most?) of this tax would be saved and this saving would eventually be reflected in the share price (as long as the company remains successful). If I am right then this would benefit the long term shareholders who don't need the dividend but on the downside would cause a further reduction in liquidity at least until the share became more widely known in the market. Is my perception correct?

Assuming I have got the above right, I would much prefer seeing my dividend non taxed (instead of taxed) and retained by CDI. They seem to be doing very well indeed. Wasn't YE2012 up 150% on YE2011? Like RYM I think there is significant hidden value in the unrealised worth of their assets.