LOL @ IBD Article Title: "Sturm Ruger Stock Falls Off High As Dividend Slashed"
The title makes it sounds catastrophic, lol. Guys, they not just cut but "slashed" the dividend! TIme to sell! Buried in the article is the fact that the dividend is not a set dollar amount but is set at a percentage of earnings. Thus, it varies as earnings vary and it is not negative for the dividend to decrease relative to last quarter's earnings. Dang, the forward dividend yield is mid-3%, it got "slashed"! Time to sell!
What kind of idiot "journalists" don't understand that if the dividend is 40% of earnings and earnings are conpared on a YoY basis, THEN the only comp that makes sense for the dividend is YoY, not QoQ !!! It certainly isn't rocket science !!!
The dividend dropped slightly because revenues and profits dropped slightly, due to a drop in production. There are two reasons for a drop in production: (1) roof collapse in Prescott AZ due to hail storm, and (2) decreased workdays in Q3 2013.
Units produced Q3 2013 dropped from 575,400 to 554,700.
The SEC Form 10-Q filing states "the reduction in Units Produced and Units shipped in 2013 Q3 versus 2012 Q@ is attributable to the decrease in the number of workdays in 2013 Q3 versus Q2 2012. "