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Westshore Terminals Investment Corporation Message Board

  • wheelbarrowme wheelbarrowme Jan 29, 2009 11:32 PM Flag

    Affect of 2012 Corporate Conversion on Westshore

    Following are based on $Cdn:

    Westshore must convert to a corporation in 2012. What effect will that have on the worth of Westshore's dividends and on us investors? Last quarter's 0.52 cent dividend was high and not a normal average, which I think will return to the 0.28 cent per quarter range during a prolonged recession/ depression. In 2012, 25% corporate taxation will reduce 0.28 cents to 0.21 cent dividend, which in turn will be taxed at the individual rate of 15% for a net 0.178 cents to investors which would yield 7.9% return on investment at a $9.00 Cdn stock price. Not so attractive, since the Westshore terminal cannot be physically enlarged due to geological constraints at Roberts Banks. Without a capacity to grow, the future for Westshore does not look very good to me; the best days are long past. This all means that Westshore's unit price will likely drop to the $7-$8 Cdn range. $8 Cdn a 17.8 cents quarterly will still only yield 8.9% which is not too good with expected acceleration of inflation coming. So, over the next two years, I expect the Cdn unit price will decline to the $7 range. If you pay $9 Cdn and price drops to $7, that is a 22% capital loss!!!

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