I posted this on the '10% plus dividend payers' thread a week or two ago (as a 20% plus payer) but have decided to revise for the 5c fall in exchange rate since, and post here.
Expected profit for the y.e. 31/12/14 is 3 cps.
Using the profit matrix
here, 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 bolded figures are the current ones.
Tailwinds for NZR include low oil prices, increased petrol consumption, high refining margins, low exchange rates, Te Mahi Hou expansion, and active management bringing in many efficiencies.
As noted above, Chevron's refining division just announced a
fourfold increase in profits in the most recent quarter.
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 |
19 |
20 |
21 |
22 |
23 |
|
|
|
|
|
|
|
|
|
|
|
EPS-AT |
0.0 |
52.0 |
54.6 |
57.3 |
60.2 |
63.2 |
66.4 |
69.7 |
73.2 |
76.8 |
epsAT, TMH |
0.0 |
0.0 |
14.0 |
14.7 |
15.4 |
16.2 |
17.0 |
17.9 |
18.8 |
19.7 |
total EPS-AT |
0.0 |
52.0 |
68.6 |
72.0 |
75.6 |
79.4 |
83.4 |
87.6 |
91.9 |
96.5 |
DPS, net |
0.0 |
39.0 |
51.5 |
54.0 |
56.7 |
59.6 |
62.5 |
65.7 |
68.9 |
72.4 |
Gross div yield |
0% |
22% |
29% |
30% |
32% |
33% |
35% |
36% |
38% |
40% |
|
|
|
|
|
|
|
|
|
|
|
Growth rate |
5% |
|
|
|
|
|
|
|
|
|
Div pmt rate |
75% |
|
|
|
|
|
|
|
|
|
Sh price |
$ 2.50 |
|
|
|
|
|
|
|
|
|
Notes:
NZR might not pay such a high percentage in dividends, given that it's spending so much on TMH.
This report forecast debt to peak at 240m in 2015.
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.
These figures seem too good to be true. My dividend flow model gives a value of 9.21
As a double check, Benjamin Graham’s valuation method, V=eps*(8.5+2Growth), gives a valuation of 52*(8.5+10) = $9.62
Even if the market is skeptical, seems more likely that the price will go up than down.
Bookmarks