Q: On the website of SOBO it is stated that the SOBO dividend will be 14% of the TRP dividend prior to spin off. Therefore the amount of SOBO dividend will be 14% x $3.84 = 54 cents. This will give a dividend yield of about 1.7%.
But some analysts are stating that SOBO's dividend will be north of 9%.
Can you please clarify this discrepancy ?
Thanks
But some analysts are stating that SOBO's dividend will be north of 9%.
Can you please clarify this discrepancy ?
Thanks
5i Research Answer:
There are conflicting reports. We think 9% is too high, but we need to await the official declaration but the company on November 7. TC Energy currently pays a quarterly dividend of 96 cents a share, or $3.84 annually. The total dividend amount received by investors will be roughly the same after the spinoff, with about 86 per cent allocated to TC Energy shares, and the balance to South Bow shares, the companies have said. The exact dividend amounts won’t be official until both companies declare dividends on Nov. 7. But South Bow’s investor presentation refers to a “base dividend” of US$2 a share, or about $2.75 in Canadian dollars, for an implied yield of about 8.6 per cent based on South Bow’s share price.