Q: My wife and I currently have 6.8% of our combined retirement savings invested in ENF. As we have made this acquisition quite recently, we are neither up nor down on this investment. We've just received the company's 2017 annual report and I'd appreciate your confirmation of a key financial metric, I see noted within the information we've received.
On page 4 of the 2017 Annual Report I see an indication that the company's Dividend Payout Ratio climbed from a level of 86.9% in 2016 to level of 96.1% in 2017. My first question is: Am I correct in understanding that the firm therefore paid out 96.1% of all it's net income in 2017?
The reason I ask that question is that the information we received includes a very clear statement of the company's intention to continue to raise their already very generous dividend by 10% in each of 2019 and 2020. They point to planned future projects, they seem to feel should make those targets eminently achievable.
If they are already paying out 96.1% of their net income, won't they likely need to grow that income by at least 10% in any year in which they might wish to increase their dividends by 10%; if they wish that dividend level to be sustainable over the longer term?
How likely do you feel their targets for income growth and dividend growth might be?
Please know that we can tolerate substantial swings (declines) in the price per share of this holding, provided we believe the dividends are both sustainable and likely to grow at least at the rate of inflation, going forward. Thank you!
On page 4 of the 2017 Annual Report I see an indication that the company's Dividend Payout Ratio climbed from a level of 86.9% in 2016 to level of 96.1% in 2017. My first question is: Am I correct in understanding that the firm therefore paid out 96.1% of all it's net income in 2017?
The reason I ask that question is that the information we received includes a very clear statement of the company's intention to continue to raise their already very generous dividend by 10% in each of 2019 and 2020. They point to planned future projects, they seem to feel should make those targets eminently achievable.
If they are already paying out 96.1% of their net income, won't they likely need to grow that income by at least 10% in any year in which they might wish to increase their dividends by 10%; if they wish that dividend level to be sustainable over the longer term?
How likely do you feel their targets for income growth and dividend growth might be?
Please know that we can tolerate substantial swings (declines) in the price per share of this holding, provided we believe the dividends are both sustainable and likely to grow at least at the rate of inflation, going forward. Thank you!
