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Rentech Nitrogen Partners, L.P. Message Board

  • dividendseeker dividendseeker Mar 20, 2013 12:06 PM Flag

    The facts

    Here are the facts for the dividend investor about RNF.
    Revenues in 2011 were 199 million and 261 million in 2012 that's 31% growth in revenues.
    EPS was .30 per share in 2011 and 2.78 in 2012 that's 826% growth in EPS.
    Distribution for 2012 was 3.30 per unit and is projected to be 2.60 per unit in 2013.
    Many people are look at the lower 2013 lower distribution and wonder why, so lets take a look at why it will be lower in 2013. RNF has 2 planed major expansion projects scheduled for the second half of this year that will cause downtime for both its facilities. Therefore, it will have lower earnings and distribution for 2013. Based on todays price you have RNF trading at 12x earnings with a 12% growth rate the currently yield based on the 2.60 projected 2013 distribution is now 6.2%. So your being paid 6.2% to wait for 2014 when the new expansion projects will add considerable new production.

    Sentiment: Strong Buy

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    • Those are indeed the current facts dividendseeker.....but a stock price is based on future value and distributions (dividends). They are spending money on capital right at the time when it looks like their primary cost, which is natural gas, is rising fast. RNF stock has dropped 30% as of late as natural gas has raised 30%. Might not be such a great time for capital expansions. Same thing happened to the mining guys last year and now they are in cash flow trouble. I see a downward trend for RNF for awhile.

    • Distribution history for 2012 is: Q1 .53 Q2 1.17 Q3 .85 and Q4 .75 which is 3.30
      to carry this projection to 2013 we should see:
      Q1 .42 Q2 .91 Q3 .66 and Q4 .61 which get us to the 2.60 projected.

      Sentiment: Strong Buy

      • 2 Replies to dividendseeker
      • On 5/11/2012 Management provided total cash distribution guidance of $2.86 for the year, which was an increase over previous guidance. On 8/10/2012 total cash distribution guidance was increased to $3.30.

        Management's best interests are better served by increasing and/or beating somewhat conservative estimates rather than decreasing and/or missing more aggressive estimates. On the surface, the planned downtime as a percent of total available time doesn't seem to warrant the amount of decrease included in the distributable cash guidance for 2013.

        I expect Q1 to be slow due to the weather in RNF's market area, and Q2 to be better than expected, followed by an upward revision in guidance.

        Sentiment: Strong Buy

      • I would reverse your Q1 and Q2 , do to the plant downtime will happen in the latter quarter.

    • More facts- Management said the new expansion projects should add about .90 to 2014 distribution from a normalized 3.25 which IF all things hold even puts 2014 distribution around 4.15. Everyone will have to wait and see.

13.78+0.09(+0.66%)9:51 AMEDT