ZEL - Z Energy.

[Beagle]

Industry standard reporting is replacement cost. As someone who clearly invests for safe yield I strongly recommend you put in some effort on understanding this one for your own benefit. Fuel is a consumer staple just like power and food, (regardless of whether or not it fits the classic definition of same for inclusion is consumer staple indices) and 12% gross yield is exceptional.

The presentation contains some commentary on the future effect of demand for petrol, (note of the total volume supplied petrol is just 29%)
Ante-up with some intellectual application mate, you might really like what you find http://nzx-prod-s7fsd7f98s.s3-websit...935/299133.pdf

It is well worth noting that average broker forecast dividends for FY20 were just 47.7 cps so the company mid point dividend forecast of 51 cps fully imputed is a material beat of ~ a 7% increase on market expectation. https://www.marketscreener.com/Z-ENE...98/financials/
This could lead to a not dissimilar sized SP increase.

[minimoke]

Fuel is a consumer staple just like power and food, (regardless of whether or not it fits the classic definition of same for inclusion is consumer staple indices) and 12% gross yield is exceptional.

I agree its a consumer staple. Its essentially a non-discretionary "need". As evidenced by the 1.3% drop in industry volumes - despite the increase in taxes and pump prices. People just have to have fuel.

[sb9]

result just as we alluded too yesterday, margin pressure

Z has delivered Historical Cost Net Profit after Tax (HC NPAT) of $186 million, a decrease of$77 million from the prior corresponding period (PCP). The 29% decline reflects crude pricemovements in FY19, steadily rising in the first half then falling steeply during the third quarterto end the year largely flat.

So based on this the current period has seen oil rise steadily again so im presuming its bad for them based on the above comments

From their release FY20 Outlook is based on following:

"The FY20 forecast is based on an average barrel price
of US$70 per barrel and USD/NZD exchange rate of 0.68."

And Oil currently is tracking $72/barrel and USD/NZD cross rate of 0.6622, so on both counts they're already facing headwinds. And with RBNZ expected to cut rates, it might put further pressure on NZD against USD.

[bull....]

Industry standard reporting is replacement cost. As someone who clearly invests for safe yield I strongly recommend you put in some effort on understanding this one for your own benefit. Fuel is a consumer staple just like power and food, (regardless of whether or not it fits the classic definition of same for inclusion is consumer staple indices) and 12% gross yield is exceptional.

The presentation contains some commentary on the future effect of demand for petrol, (note of the total volume supplied petrol is just 29%)
Ante-up with some intellectual application mate, you might really like what you find http://nzx-prod-s7fsd7f98s.s3-websit...935/299133.pdf

It is well worth noting that average broker forecast dividends for FY20 were just 47.7 cps so the company mid point dividend forecast of 51 cps fully imputed is a material beat of ~ a 7% increase on market expectation. https://www.marketscreener.com/Z-ENE...98/financials/
This could lead to a not dissimilar sized SP increase.

z is not a consumer staple. under gics classifications z falls under energy sector in particular oil & gas marketing therefore you are inventing things.

[bull....]

From their release FY20 Outlook is based on following:

"The FY20 forecast is based on an average barrel price
of US$70 per barrel and USD/NZD exchange rate of 0.68."

And Oil currently is tracking $72/barrel and USD/NZD cross rate of 0.6622, so on both counts they're already facing headwinds. And with RBNZ expected to cut rates, it might put further pressure on NZD against USD.

exactly , my point from above was too highlight they are currently experiencing margin pressure

[sb9]

exactly , my point from above was too highlight they are currently experiencing margin pressure

I would be careful buying in for Divvy/yield, future capital erosion might outweigh divvy amount.

[Beagle]

Which could quite easily be transitory factors too.
Worth noting that the average analyst view is that dividends for FY21 will increase to 54.9 cps fully imputed which is quite a nice increase of nearly 4 cps on the mid point of the company forecast for FY20 and puts ZEL on a prospective gross yield at the theoretical ex divvy price I posted earlier this morning of 12.92% ! WOW !...I might retire early

[minimoke]

I would be careful buying in for Divvy/yield, future capital erosion might outweigh divvy amount.

That is always a rick (and one TRA have exposed me to). Lets see how this plays out at the end of the month when it goes ex div.

[bull....]

I would be careful buying in for Divvy/yield, future capital erosion might outweigh divvy amount.

could be your classic value trap. if buying for the div ( which is nice) you must assume the risk that over time you might lose your capital

[Beagle]

z is not a consumer staple. under gics classifications z falls under energy sector in particular oil & gas marketing therefore you are inventing things.

I couldn't care less whether its fits the specification of some index or not. People and business's have to buy it. In the last oil crisis last decade when Oil hit $U.S.147 a barrel and fuel prices skyrocketed fuel volumes declined just 2%. That's not a typo, just 2%. What that tells us is that the demand is extremely robust and highly inelastic relative to price. Business's and consumers (other than the very small percentage of those that have an electric car) must buy it whether they want to or not, just they must buy food or electricity whether they want to or not. It is a consumer staple item and only those that can't think for themselves and rely on indices will come to a different conclusion.

Yield growing to 12.9% gross for FY21 is extraordinary. Not my job to sell it to you, you can either see the opportunity or just keep those blinkers on, your choice and your loss if you can't see it.

I think the yield is more durable than the GNE yield...ouch, that remark should make you think.