if you are long term holder, then you should be fine cause today's paper saying that Maxis could give 10c divvy this quarter, announcing on 19 Feb.

you have some?

Higher Maxis dividends expectedBy RISEN JAYASEELAN


DiGi puts pressure after record high dividend payout


risen@thestar.com.my

PETALING JAYA: With DiGi.Com having raised its dividend payout to record levels, the pressure is on Maxis Bhd to declare a similarly attractive payout, analysts said.

Maxis, which declared a 6 sen dividend when it announced its FY2009 third quarter results last November, will report its fourth quarter results on Feb 19.

Analysts consensus estimates are that Maxis will pay a final dividend of 10 sen a share then.

To recap, DiGi has declared a total dividend payout of RM1.78 for last year, giving the stock a dividend yield of 8%, based on its current price of RM22.32 a share.

That payout equalled 138% of DiGi’s 2009 net profits, way above its guidance of paying out 80% of profits.

Maxis on the other hand, has a declared dividend payout ratio of 75% of its net profits but is expected to pay out more than that.

In the past years prior to its being de-listed, Maxis has paid out more than 100% of its net profits.

“We believe Maxis will pay out dividends each quarter, with a larger amount to be paid in the fourth quarter of every year. A special dividend at the end of every year is also possible, in our view,” stated a report by JP Morgan dated Jan 5.

Indeed, analysts are expecting Maxis’ dividend yield to be in the 8% region for FY2010.

Based on its current share price of RM5.33 per share, Maxis would have to declare total dividends of 43 sen a share in FY2010 in order for its shares to enjoy a yield of 8%.

This is in line with JP Morgan’s estimate, that figure that Maxis would pay out 127% of its 2010 net earnings.

Analysts consensus estimate of Maxis’ FY2010 net earnings is RM2.5bil. 127% of that works out to RM3.17bil, which in turn translates into about 42 sen per Maxis share based on its issued share base of 7.5 billion shares.

The question is, can Maxis afford to do that?

Maxis declined to comment for this article, considering it is a closed period, pending their results announcement.

Dividends are typically paid from free cash flows, which are essentially the companies EBITDA (earnings before interest, tax, depreciation and amortisation) minus capital expenditures.

In a previous interview with the media, Maxis’ chief financial officer Rossana Rashidi has said that the company’s capital expenditure is expected to taper off post-2010 because by then, lumpy expenditures such as rolling out its mobile broadband footprint, in terms of coverage and capacity, would have been done.

Rossana has also said that Maxis’ net debt to ebitda level post-listing of 1.1 times gave the company an opportunity for “active capital management”. Maxis has said that it has the option to raise its net debt to EBITDA to between 1.7 to 2 times.

JP Morgan estimates Maxis’ free cash flows to be in the region of RM3.5bil for 2010 and RM3.8bil in 2011, giving Maxis sufficient headroom to declare attractive dividends.

This should put it in a good position to compete with DiGi’s attractive yields.

“Don’t forget that it was Maxis’ re-listing and its ensuing dividend promises that first upped the ante and subsequently got DiGi to raise its payouts,” noted an analyst.

Interestingly, the major shareholders of both companies are in need of cash due to their heavy investments in markets such as India.

This post has been edited by sharesa: Feb 9 2010, 03:12 PM

yeah-lor....with this kind of unstable market, ada untung just jual....
aya.....don't psycho him.....

What Bursa quoted is plainly general. It is not as simple as it projects.
Who doesn't know that trading stocks means buy low sell high. Talking about buying low and selling high, how low is low and how high is high? To gather this for common people like us is to study the company and find the intrinsic value of the company by reading their news , financial reports and calculating their PEs, etc.
"It is never to buy and hold"
this statement is overrule. But if "it is never to buy and hold forever", then it makes sense.
Most people make their bucks with buying and holding stocks, just one example is the pioneer shareholders of Public Bank Berhad. And many of our forummers who bought stocks last year and held on till this year are enjoying surplus capital appreciation. They can choose to sell now as our index has reached quite high.
But, if for example , as you mentioned, if they keep on buy low sell high with the similar stock, which means frequent in and out , say since last year, I don't think they can earn much, they may probably lose out in dividends, lose more to commission and fees and most importantly it is very hard to time the market. They might lose all.

This post has been edited by sharesa: Feb 9 2010, 10:36 PM

eh? where got ignore button one?

mostly sold but holding some.
Am still confident in that counter. Only early next month would the report be out which is expected to be in flying colours. Hope the sentiment improves.

hopefully, i wanna average down but i feel that market seems to have room to go down again.

I hope you are right, since no pre-CNY rally, then rebound in March.
But so many times I have gone through that post-CNY, stocks drop plentiful!!!

David, don't mind could you tell me what is the supposedly Kencana price ex-bonus based on last pre-bonus price?

xie-xie

something unusual about GenM. Today's rebound is quite high for its standards.
Its report is coming out within 2 wks, is it some sort of special divvy coming out?

Ah Lim, don't disappoint us , HOR.....

like what you said earlier this morning Proton, today could be another trap....

mana itu "ignore button"?.. just jk.

I wanna be bounced up & down

Tan-chin-ku-liao...

finally GenM crossed the 2.81 barrier....