Q: You have not been very supportive of Chemtrade. Are its recent earnings starting to win you over? At least as a dividend payer with a good, safe dividend.
5i Research Answer:
Chemtrade posted strong Q1/24 results, and management is now guiding to the upper end of its 2024 guidance range. The operating segments are performing well and with a significantly stronger balance sheet relative to previous years, the Board has approved a 10% share buyback and the company is also considering strategic M&A opportunities. The balance sheet has improved a bit versus prior years as cash flow has grown. It is still cyclical, but we will give it kudos for its strong quarter and guidance. It is also priced well at 7X earnings. We note the company has cut its dividend in the past, however and at 5.5c is still not near its prior 10c level.