Well I have some good news. As a result of the declared dividend, that will be paid in FY2022, the 'capitalised dividend valuation' of this company has increased (was 28cps)!
Year |
Dividends as Declared |
Gross Dividends |
Gross Dividend Total |
FY2018 |
0c +0c |
0c + 0c |
0c |
FY2019 |
0c + 0c |
0c + 0c |
0c |
FY2020 |
3.5c + 0c |
4.86c + 0c |
4.86c |
FY2021 |
2.5c + 0c |
3.47c + 0c |
3.47c |
FY2022 |
2.0c +0c |
2.78c + 0c |
2.78c |
Total |
|
|
11.11c |
Averaged over 5 years, the dividend works out at 11.11c/5 = 2.22c (gross dividend) per year.
I have considered a capitalised dividend rate of 5% as appropriate for Chorus. However, taking account of VTL being a much smaller beast with a concentrated two area geographical market for broadband, I feel a 6% capitalised dividend rate is more appropriate here. This assumption, combined with the five year average of earnings gives a 'fair value' for VTL shares as:
2.22c / 0.06 = 37cps :t_up: