with all signs pointing to rates dropping a 14% div yield will be too high. 10% dividend yield would be more appropriate. If the 11.56dps can be maintained the SP would need to increase 40% to $1.15 to bring the yield down to 10%
The current payout ratio is 84%, well above the div policy of 50-60% of npat. However i am not sure why they have this policy set so low? maybe it was put in place when they were self funding the loan book. Even paying out 84% of profits they have enough cash to expand in auckland.
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