iPoint (iPoint.cz)
Czech markets  |  February 28, 2013 12:28:12

O2: For how long is sustainable payout of CZK 30 per share?


Is the current O2 payout to shareholders in the amount of CZK 30 per share to a sustainable future? There is some space that the dividend will increase again in the future? And if not, how long the company can pay 30 CZK, without significantly undermine its stability?

At the outset we first consider a theoretical concept. Free cash payout to shareholders may have multiple forms. The first is a classic from the positive dividend income. If the company makes a profit, the AGM decide on its distribution to shareholders. Not always it is true that when a company reaches the net profit, the available funds. This can happen if the company while generating more revenues than costs, but they are yet kind character. The reverse is not true.If the company reaches losses, dividends may be paid, even if it is available free resources. This rule serves as a barrier against pulling out of the assets of the company and is a protection for creditors.

Another way is to release cash from the reduction of the capital. This may include the payment of retained earnings or share premium reduction or ZK. These free resources are available to the company to develop its business. But if the company does not plan to expand further, it may decide to pay these excess funds to shareholders.

An alternative way to indirectly distribute cash to shareholders, the repurchase of shares. This can both increase the share price due to demand exceeding supply and at the same time there is a historical increase in earnings per share (EPS) and potentially expected EPS if the company manages a positiveVH.

In order to be able to determine how much the company can pay the total of the shareholders as a dividend, we will be interested not so much the result as much as operating cash flow, which is the net profit after tax increased by non-cash items (such as depreciation) and decreased by change in net working capital. Items from operating cash flow, however, must still deduct an item of investment cash flow, which includes for example the necessary investment in the maintenance of fixed assets, purchases and sales of assets, made acquisitions etc. Furthermore, we will be interested in how the amount of cash the company in the past year at its disposal. This will only get the amount that the company can pay the current year's shareholders. Whether in the form of dividends, lower equity or repurchase its own shares.

Let's take a look at what options payments available funds currently has O2 ...

Read by Pavel Safarik read the iPoint

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O2: Na jak dlouho je udržitelná výplata 30 Kč na akcii?

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