09-09-2014, 05:18 PM
(09-09-2014, 04:54 PM)greengiraffe Wrote: [ -> ]CMP - Firmly On Track For Growth
CMP held its EGM to acquire Jiurui Expressway this morning.
The main message that emerged from the meeting is as follows:
i) CMP can always retain earnings for acquisition of toll road - will take 3 years to accumulate earnings to buy a new toll road.
ii) CMP prefers to grow and share dividends with shareholders so that it can issue new shares at higher prices (on assumption that mkt rewards CMP for its generous and growing dividend policies) alongside with debt to acquire toll roads.
I think based on ii) CMP felt that they can achieve their objectives quicker especially since it is no longer restricted by the constraints of share price trading below NAV.
Hence, CMP's rich dividend yield is expected to be sustained and grow forward.
Buy for the 7.5% current yield with 5% capital gains in hope for 5% dividend yield with 7.5% capital gains.
HU8TPPY
GG,
Thank you for the information provided and it has open up my eyes on this S chip.
I particularly like your last commentary on the 5% dividend yield with 7.5% capital gains. CMP's model of high debt, high dividend model reminds me of our telco's Starhub, Singtel.
It seems to me that they are in the early stage and by all means, very capable to achieve a higher last done price with more acquisitions. Market saturation might occur when there are no more expressways to be purchased, or if expressways need to be refurblished - All of which are not in the near future.
Keep up the good work in this forum and we will look forward to your next informative entry.