Q: Can you provide some background on this company’s special dividends and what to expect in future? How do you view this kind of less committed program of cash return when valuing a company?
5i Research Answer:
TOU paid special dividends of 50c in November 24, 50c in August, 50c in May, 50c in March, $1.00 in Nov 23, $1.00 in Aug 23, $1.50 in May 23, $2 in Feb 23, $2.25 in Nov 22, $2.00 in Aug 22, $1.50 in May 22, $1.25 in Feb 22 and 75c in October 21. Gas prices have finally started to move, so we would expect some continuation in the 50c range. In a cyclical business, we are comfortable with this vs having a larger 'regular' dividend. Even with regular specials, it reminds investors that the business fluctuates and thus special dividends cannot always be relied on. It also of course reduces the possibility of the company cutting its regular dividend if it is not set too high to begin with.