Guys help me understand something.

According to MB2u, Digi has a DY of 10%. And paid 228 cents last FY (before tax - to keep it simple use this number).

Digi shares have a par value of 0.10c.

Now if I had 500 shares, 500 x 0.1 x 228 = 11,400c = $114 <-- I get this in dividends.

Assuming I bought the stock for $22,  the yield is $114/ 500*$22 = ~1%
Basicly due to the low par value, the returns are much lower say if the par value was $1.

I guess the par value has to be figured when buying stock based on dividends.. So one needs to be
very carfeful by just going by the dividend yield number.

Am i on the right track ?

Thanks Xuzen, I understand the concept of DY.

I'm interesed in whats actually paid out to the shareholder - and how the par price effects this.

I am eyeing Maybulk and Uchi Tech.

But Maybulk might decrease due to lower international trade. Lower crude oil will also force the shipping industry to adjust shipping rates downwards. Hence, even though profitability might remain the same, the amount of profit is less. Plus piracy issues and higher freight insurance... recently I haven't read any good news about the shipping industry.

Uchi Tech sales have been decreasing last 2 years. Not sure if they can innovate fast enough, or come up with new products to spur growth. I can't find much info on them. Nothing much on their website.

i used to like maybulk but after BDI drop to 666 pts...im a bit pessimistic...somemore, the cash in the book will b used to buy a company tat involve in offshore biz (not so sure abt it) approx 800m if not mistaken....so next year div may be affected..

bulk biz such as iron ore has been seeing contract renegotiated due to low demand..

due to low demand (volume) n low rate (BDI) ...better put ur money in guiness or carlsberg la

KUALA LUMPUR: Malaysian Bulk Carriers Bhd (Maybulk) is expected to meet resistance from minority shareholders at its EGM today to decide on its proposed acquisition of a 22.08% stake in PACC Offshore Services Holdings Pte Ltd (POSH) for US$221 million (RM802.2 million).

Some minority shareholders say the acquisition purchase price was too high and the group ought to conserve cash during such difficult financial times.

A minority shareholder, identified as Drs M A Wind of Mont Kiara, said Maybulk’s proposed investment in POSH should be re-evaluated, as the proposal amounted to about RM800 million, representing about 40% of Maybulk shareholders’ funds.

The minority shareholder said the deal might not generate better returns for its shareholders, given that POSH’s projected earnings visibility was unclear. Further, the deal is a related party transaction, given that Singapore-based Pacific Carriers Ltd (PCL), a member of the Kouk Group, owned the entire stake in POSH and 34% in Maybulk.

POSH’s last audited balance sheet as of Dec 31, 2007 showed that POSH had owed PCL US$319 million and had US$304 million short-term borrowings, as well as US$432 million capital expenditure contracted that was not provided for, the minority shareholder said. The borrowings had allegedly risen to US$412 million as of Sept 30, 2008.

“The cash however is only US$2 million. In other words, a highly geared company with huge future obligations but hardly any cash,” said the minority shareholder.

“It is clear that POSH needs a huge amount of funding for its highly aggressive growth plan. However, there is no information given how it will get that funding, nor what the status is of the borrowings from PCL,” the minority shareholder said.

Also questioned was whether Maybulk was getting a fair deal as the group would only receive 34 million shares representing 22.08% stake in POSH’s enlarged share capital, despite having committed US$221 million, compared with PCL’s commitment of US$110 million but had received 115 million shares in return.

Additionally, the minority shareholder claimed a huge part of revaluation gains (about US$440 million) that were valued by Maybulk’s independent adviser KPMG were from vessels under construction, with some only to be delivered in 2011 and hence, should not be included in the current adjusted net assets calculations.

“KPMG gives a discounted cash flow valuation of US$5.11 to US$7.45 per share. The way they have calculated this is unclear, a huge list of assumptions is mentioned but the calculation itself (projected turnover, profit, finance cost, etc) are not presented,” said the minority shareholder, questioning how a proper valuation could be done with so many uncertainties.

The minority shareholder said the last audited accounts were from almost a year ago and the income statement was not representative since the subsidiaries were acquired during that year. “POSH is fast growing and went on a spending spree ordering dozens of new vessels from shipyards. The current credit crisis has a huge impact and makes financing difficult.

“Would it not be a better idea if Maybulk simply returned the RM804 million to its shareholders in the form of a special dividend?” asked the minority shareholder.

Here's the news:

10-12-2008: Maybulk to face ire of shareholders at EGM
looks like the shareholders aren't agree with the offshore acquisition.
i like the sound of the last paragraph

someone mentioned about UCHITEC

UCHITEC is giving a Tax Exempt Dividend of 6 Sen per share.

based on today's closing price - 0.945, that would be equivalent to 6.3% DY.

Don't think it affects at all.

Par price was what was the price per share initially during IPO stage.

Market rate is what the market is willing to pay for that one share based on market sentiments.

Par price does not affect Dividend payout; earning per share does.

Xuzen

So dividend is paid often once a year?? or per quarter??

Is public bank still a good buy, besides having high dividend??? Because I don't want to put all my money in there just for few rm per lot for a year..