No they couldn't, but what about the management at Scott Technology?
SNOOPY
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Well, yes, foreigners, anything is possible. But, for the sake of focusing the investigation, I would eliminate E for the logical reason that the same income is in both terms. Also, though, I would agree with Snoopy's logic, that it cannot be T. How could T (an unusual credit) be normalised up? Therefore, we should eliminate T. That leaves us only I, D and A. So, we are making progress?
I am not sure SCT management see themselves as a 'no growth' company. But as investors I think it is reasonable to assess the company as a dividend payer only to get some idea of value.
The calculation to work out the equivalent gross figure for the FY2020s unimputed dividend, is as follows:
FY2020 Dividend P.I.: 4.0c (18.41% imputed, 18.41%/28%= 0.6575)
= 2.63c (FI) + 1.37c (NI)
= 2.63c/0.72 + 1.37c = 3.65c + 1.37c = 5.02c (gross dividend)
Year Dividends as Declared Gross Dividends Gross Dividend Total FY2016 5.5c+4.0c 7.64c + 5.56c 13.20c FY2017 5.5c+4.0c 7.64c + 5.56c 13.20c FY2018 6.0c+4.0c 8.33c + 5.56c 13.89c FY2019 6.0c+4.0c 8.33c + 5.56c 13.89c FY2020 4.0c (18.41% I) + 0c 5.02c + 0c 5.02c Total 59.2c
Averaged over 5 years, the dividend works out at 59.2/5 = 11.8c (gross dividend).
I have given some thought as to whether I should revise my sought for "gross yield" in this new environment of very low interest rates. I think that given the trade wars and the inability to move production from affected international production sites, I should not do this.
So based on my previously selected sought after 7.5% gross yield over an historic five year business cycle window, , 'fair value' for SCT is:
11.8 / (0.075) = $1.57
Now using my plus and minus 20% range to get a feel how the SCT share price might behave at the top and bottom of its business cycle.
Top of Business Cycle Valuation: $1.57 x 1.2 = $1.88
Bottom of Business Cycle Valuation: $1.57 x 0.8 = $1.26
SCT shares were trading at $1.84 on Friday 22nd May (near the upper end of my expected range) and are IMO now fully valued (from a business cycle projected dividend income perspective). With big capital spending programs on hold for many customer companies, and dividends from more buoyant years boosting my valuation, a significant recovery in business is already priced into SCT shares as they trade today The growth story, if it still exists, has not been priced in though.
SNOOPY
Snoops ..3 requests re your puzzle ..no response
Nice how some companies treat their shareholders with contempt ...often reflected in both company performance and share price.