Reworking these calculations with the figures re'Balance'd
|
Scenario $100.5m debt repayment |
Scenario $118m debt repayment |
eps {A} |
2.49c |
2.60c |
PGW Rural Rump: Market Valuation {B} |
18.3c |
20.7c |
PE ratio {B}/{A} |
7.2 |
8.0 |
Gross Dividend Yield {A}/{B x 0.72} |
18.9% |
17.4% |
Notes
1/ In the gross yield calculation I am assuming that all earnings are paid out as dividends. With 'Agria' better capitalized following the capital repayment and with some potential investment to be made on 'PGW Rural Rump' going forwards, this might not happen.
2/ The PE ratios are looking fair for this type of business. But remember we are in a favourable time period in the rural cycle.
3/ The potential dividend yield looks fantastic, with the slightly better capitalized version of 'PGW Rural Rump' showing a lower yield. But perhaps that better capitalization could be handy in an industry notorious for 'rural downturns'. And in such downturns I would expect any dividend yield to drop .