Q: With about a 9% indicative yield at current stock price - SOBO looks very attractive as income investment for the medium-long term. I can't believe that the spin-out would be created with anything but a very solid sustainable dividend - so the high dividend yield in this case is more a sign of unfamiliarity and churn as opposed to "risk". Do you agree with this view??
Thanks
Thanks
5i Research Answer:
Generally, but we have seen conflicting reports on the dividend amount. It is to be set on Nov 7 by the company. SOBO has indicated it wants to pay down debt, so 9%+ seems unreasonable to us if that is the goal. We are going to defer to the company and await the official dividend declaration. But we do think the stock will be attractive for income and some growth over time.