it has a low P?E, High dividend yield and a high payout ratio of over 100%
Just wanted to gather your thoughts as to the sustainability of the dividend and the growth potential given the high payout ratio
LIF's dividend varies with earnings, so it can get adjusted up/down on a fairly regular basis. We would not consider it sustainable in the sense of the word, as it will be highly variable based on prices and volume of iron ore. It was raised once and lowered twice in 2024 alone. Earnings vary widely, and EPS this year is expected to be less than it was in 2021. But this seems to be priced in at only 10X earnings and 9.7% yield. We would still see the stock as 'decent' for income investors who are willing to put up with the dividend volatility. The company is debt free and essentially just cashes royalty cheques from the Iron Ore Company of Canada. It has paid some dividends for more than 25 years, and did not even stop payments during the pandemic.