Latest news with #dividendcut
Yahoo
26-05-2025
- Business
- Yahoo
SATS (SGX:S58) Is Paying Out A Larger Dividend Than Last Year
SATS Ltd. (SGX:S58) will increase its dividend from last year's comparable payment on the 15th of August to SGD0.035. Despite this raise, the dividend yield of 2.3% is only a modest boost to shareholder returns. We've discovered 1 warning sign about SATS. View them for free. It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. However, SATS' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow. Looking forward, earnings per share is forecast to rise by 40.9% over the next year. If the dividend continues on this path, the payout ratio could be 19% by next year, which we think can be pretty sustainable going forward. See our latest analysis for SATS The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was SGD0.13 in 2015, and the most recent fiscal year payment was SGD0.07. The dividend has shrunk at around 6.0% a year during that period. A company that decreases its dividend over time generally isn't what we are looking for. With a relatively unstable dividend, and a poor history of shrinking dividends, it's even more important to see if EPS is growing. Although it's important to note that SATS' earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio. In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious. Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for SATS that investors should take into consideration. Is SATS not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
25-05-2025
- Business
- Yahoo
What's going to happen to the BP share price over the next 5 years?
Accurately predicting the BP (LSE:BP.) share price from one week to the next isn't easy. As for looking five years ahead, well, it's virtually impossible. However, I recently stumbled across an article on The Motley Fool that was written on 24 May 2020. It had the headline: 'Where will the BP share price be in 5 years?'. And guess what? The writer was pretty accurate. They wrote: 'Looking ahead, I'd say that the BP share price is probably fairly valued at the moment'. At the time, the energy giant had a market cap of around £63bn. This month (May), it peaked at just over £61bn. Within the normal bounds of forecasting, I think this was a pretty good prediction. The author's Nostradamus-like skills were also evident when they wrote: 'I think a dividend cut is necessary – perhaps a 50% reduction.' Indeed, it was subsequently halved during the second quarter of 2020. Again, that was an excellent prediction. And if that wasn't good enough, the writer said the group's share price could hit 500p, if oil prices started to increase. Indeed, in February 2023, following Russia's invasion of Ukraine, Brent crude spiked and BP's share price broke through the £5-barrier. Impressive stuff. I'm going to spare the author's blushes by not naming them but, to give you a clue, they are still writing insightful articles today. Okay, it's my turn now. With the majority of BP's earnings coming from oil (as opposed to gas), it stands to reason that the price of 'black gold' is going to have a big influence on its profit. As the table below shows, there's a strong positive relationship between the oil price and the level of cash generated. This tells me that the company's share price is also closely correlated. Year Brent crude price ($/barrel) Operating cash inflow ($bn) 2018 71.2 22.9 2019 64.3 25.8 2020 42.0 12.2 2021 70.9 23.6 2022 100.9 40.9 2023 82.5 32.0 2024 80.5 27.3 Brent crude is currently at $64 a barrel. It's recovered a little in recent weeks but it's still comfortably below pre-'Liberation Day' levels. But the prevailing price depends on the interaction of buyers and sellers. In particular – as we have seen with the uncertainty created by President Trump's trade policy — demand will be affected by global economic conditions. I recently took a position in BP as I believed the oil price wouldn't remain at its current level for long. According to the International Monetary Fund, Saudi Arabia needs it to be at $90 for it to balance its budget. And as the biggest OPEC+ producer, it will have a major influence on the price. However, some believe the country's preparing for the worst and is planning to cut spending on infrastructure products. I was also tempted by the stock's above-average yield, which is currently (23 May) 6.6%. But I'm aware of the challenges facing the sector. There are numerous industry-specific financial, operational, and environmental risks. The truth is that nobody has a clue where the oil price will be next month, let alone in 2030. On reflection, I think the BP share price will be higher than it is today – history suggests Brent crude will bounce back soon — but I'm not going to make any firm predictions. That way, I won't be embarrassed if someone finds this article in five years' time. The post What's going to happen to the BP share price over the next 5 years? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool James Beard has positions in Bp P.l.c. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
Yahoo
24-05-2025
- Business
- Yahoo
Xerox Holdings Corporation (XRX) Cuts Dividend Again, Now Down to $0.025
Xerox Holdings Corporation (NASDAQ:XRX) announced that its Board of Directors has updated its dividend policy ahead of completing the Lexmark acquisition, lowering the quarterly dividend to $0.025 per share, which amounts to $0.10 annually. Based in Connecticut, Xerox Holdings Corporation (NASDAQ:XRX) specializes in creating and manufacturing print and digital document products, along with providing related services. In December 2024, Xerox Holdings Corporation (NASDAQ:XRX) had already announced a dividend cut tied to the Lexmark deal, focusing on paying down debt once the acquisition is finalized. Since then, rising yields on Xerox's publicly traded debt have increased its borrowing costs, making debt reduction even more important. In addition, the anticipated earlier closing of the Lexmark acquisition and ongoing tariff and trade uncertainties have made maintaining financial flexibility a top priority. Mirlanda Gecaj, chief financial officer, made the following comment about the recent development: 'Consistent with our previously stated capital allocation priorities to reduce leverage post-closing, we believe reducing our dividend creates greater financial flexibility to deploy cash in the most accretive manner. The dividend remains an important component of our capital allocation policy as we continue to optimize our allocation framework ahead of the Lexmark acquisition close.' XRX has a dividend yield of 11.12%, as of May 23, and the stock has declined by over 45% since the start of 2025. While we acknowledge the potential of XRX as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than XRX but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the . READ MORE: and Disclosure. None. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
22-05-2025
- Business
- Yahoo
Xerox shares plunges after slashing dividend ahead of Lexmark deal
-- Shares of Xerox Corp (NASDAQ:XRX) fell sharply after-hours Thursday, down 15%, following the company's announcement of an 80% reduction in its quarterly dividend. The move comes as Xerox prepares for the acquisition of Lexmark, which has prompted a strategic shift in capital allocation to prioritize debt repayment. In a recent statement, Xerox declared a quarterly dividend of $0.025 per share, a significant decrease from the previous $0.125 per share. This adjustment sets the annualized dividend at $0.10, with a resulting annual yield of 2%. The new yield compares to the prior dividend yield of close to 10%. The new dividend will be payable on July 31, 2025, to shareholders of record as of June 30, 2025. The dividend cut is part of Xerox's capital allocation strategy to manage the financial implications of the upcoming Lexmark acquisition. In December 2024, Xerox signaled this change, citing the need to reduce leverage post-closing as a key driver. The company has since faced rising yields on its publicly traded debt, increasing its cost of capital. This financial pressure, coupled with the accelerated timeline for the Lexmark deal and ongoing market uncertainties due to tariffs and trade volatility, has led to a greater emphasis on maintaining financial flexibility. Xerox's CFO, Mirlanda Gecaj, emphasized the importance of this strategic move, stating, "Consistent with our previously stated capital allocation priorities to reduce leverage post-closing, we believe reducing our dividend creates greater financial flexibility to deploy cash in the most accretive manner." Gecaj reaffirmed that dividends continue to be a significant aspect of Xerox's capital allocation policy as the company fine-tunes its financial strategies in anticipation of the Lexmark acquisition. Despite the dividend reduction, Xerox maintains its 2025 guidance and expects the Lexmark transaction to be deleveraging upon closing. The acquisition is projected to be immediately accretive to adjusted earnings per share and free cash flow. Xerox also anticipates at least $238 million in synergies from the Lexmark integration, achievable within two years. The company projects that the combined cash flows of Xerox and Lexmark, along with anticipated synergies and forward flow proceeds, will substantially enhance EBITDA and free cash flow, enabling a reduction in debt towards the targeted 3x gross debt leverage level. As the company works towards reducing its gross debt leverage, Xerox plans to reassess its capital allocation priorities, including the capital returned to shareholders. Related articles Xerox shares plunges after slashing dividend ahead of Lexmark deal TSX finishes slightly higher after index inches back from record high Apple eyes 2026 smart glasses launch amid AI hardware race, Bloomberg reports
Globe and Mail
10-05-2025
- Business
- Globe and Mail
BCE's downfall is Bay Street's collective failure, from the blue-chip board to institutional investors
Just six months ago, Mirko Bibic was adamant: BCE Inc. BCE-T would not cut its dividend. At the time, the Canadian cable and wireless giant had just announced a $5-billion acquisition to expand into the United States, and Mr. Bibic, the chief executive, was grilled about the price tag. BCE's balance sheet was already loaded with debt, and the company's cash flow did not cover its quarterly payout to shareholders. Never mind the noise, Mr. Bibic seemed to say. Expanding into the U.S. would deliver more cash flow. The payout could be managed so long as the dividend stopped growing, and BCE had been raising it since 2009. The argument backfired. Over the next half-year, BCE's shares fell another 34 per cent, and by Thursday morning, they traded at roughly the same price as they did in December, 1999. To save face, the CEO capitulated. On Thursday, BCE announced it would cut its dividend by 56 per cent, saving $2.1-billion annually, and the company is bringing in a partner, PSP Investments, to help fund expenses in its new American division. Investors seem to approve, with the stock jumping 7.8 per cent since. But now that BCE has bought some time, there needs to be an autopsy, because it never should have come to this. The company's downfall can't be pinned on higher interest rates or management alone. What's played out is a collective failure on Bay Street, from BCE's blue-chip board, to analysts, to institutional investors. Rita Trichur: BCE's dividend cut was inevitable. But its growth plans are confounding It is true that the initial pressure on BCE's shares came from higher interest rates. As rates rose in 2022 and 2023, dividend-loving investors recalibrated because securities such as ultrasafe guaranteed investment certificates started paying similar yields. But over the past two years, there has also been endless denial – particularly since September, 2023, when Vince Valentini, an analyst at TD Securities, noticed something odd in BCE's financial statements. Ultimately, he realized the company spends hundreds of millions of dollars each year on leases for things such as satellites – it is the largest provider of satellite video subscriptions in Canada – but did not include their full cost when calculating free cash flow. Once he included these leases, Mr. Valentini found BCE had $550-million less in cash flow each year, which mattered because it sent BCE's dividend payout ratio – a measure of dividend payments to cash flow– soaring to 148 per cent. That meant the payout was unsustainable – yet BCE's consistent dividend growth had been a major reason why its shares traded at a premium valuation. In a note to clients, Mr. Valentini apologized for what he called a 'historic oversight.' From there, things kept getting worse for BCE. Every year the telcos run sales around back-to-school and Black Friday, yet in the fall of 2023, the competition was unusually fierce. Quebecor Inc. had just acquired Freedom Mobile and was given access to Rogers Communications Inc.'s national cell service network, so it got aggressive with pricing to win customers. Instead of following the norms, Quebecor kept its promotions going into 2024, and has continued them to this day, limiting incumbents such as BCE from charging premium prices. While this played out, cable television customers kept cord cutting, and the federal government did an about-face on immigration. The latter was a major blow, because most Canadians already have a cellphone, so sales to newcomers matter. To its credit, BCE has not sat around idly. In February, 2024, the company announced plans to slash 9 per cent of its work force, and that September, Mr. Bibic sold BCE's 37.5-per-cent stake in Maple Leaf Sports & Entertainment to Rogers for $4.7-billion. However, the past six months have been particularly confounding. After BCE sold its MLSE stake, everyone and their mother expected the proceeds to go toward debt repayment. Mr. Bibic has invested heavily in upgrading the company's cable and internet infrastructure to high-speed fibre, and this initiative has sent BCE's long-term debt soaring to $34-billion. Yet, in November, Mr. Bibic announced the $5-billion deal to buy Ziply Fiber, which serves customers in the U.S. Northwest, and only paused BCE's dividend growth. While the expansion strategy has merit, timing matters. Just two months before the deal was announced, BCE's debt was downgraded by ratings agencies Moody's Investors Service and S&P Global Ratings. How BCE's board approved the takeover while the balance sheet is so stretched remains a mystery. Unlike rival telco giants where the CEO or executive chair has outsized influence, BCE was thought to have good governance from a reputable board, one chaired by former Royal Bank of Canada CEO Gord Nixon. (Mr. Nixon and BCE declined to comment.) As for institutional investors, they, too, overlooked the extent of BCE's dividend woes, and have barely made a peep despite all that's transpired over the past six months. Although some investors have clearly sold shares, BCE held its annual general meeting this week, and every single director got the approval of at least 95.9 per cent of shareholder votes cast. So, yes, BCE's executives deserve blame for how it came to this. But given how much was overlooked, there is lots of it to go around on Bay Street.
