SPB has been very disappointing. We do wonder if Brookfield is going to backstop it with a takeover at some point. 12-month operating cash flow was $312M and dividends were $147M. From an operational standpoint the dividend looks OK. But the company did spend $172M on fixed and other assets in the last 12 months, so free cash flow is low. With a 9.7% yield, investors are concerned on the dividend. The dividend was cut in 2011, but has not been cut since; it was last raised in 2014. Earnings and acquisitions will remain the catalysts here. Consensus calls for EPS to more than double in 2025. For that reason, we would still give it a HOLD, but would put it 'on watch' to ensure execution of this expected growth. Its last quarter was not great and it has missed estimates in six of the past seven quarters, and this is one of its issues with investors, of course. It is hard to call a floor, but if there is no change the dividend we would expect some yield buyers to start supporting it soon.
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