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Garmin Ltd. Message Board

  • stok1mom stok1mom Nov 14, 2010 11:14 PM Flag

    Is the dividend safe?

    With all the negative posts and articles about Garmin losing its GPS business because of Smart Phones, I'm wondering if we will still get our dividend that goes x on November 27.

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    • GRMN has not declared a dividend since the "special" this past April. However, GRMN has >$1B in cash. Thus, any dividend of a reasonable amount, say 4 percent of pps, would be safe.

      The company has been using cash to buy back shares and reduce some of the volatility that this stock has exhibited over the past few years.

      Since the Founder and CEO Min takes little salary, he derives most of his income from the dividend. Given GRMN's solid balance sheet and $300 mil free cash flow/quarter, the company can easily fund a dividend.

      Since the shorts have to pay the dividend on their borrowed shares, it would seem like a good option for the company to declare a dividend on short notice (pun intended).

      GRMN must appeal to the value investors in order to overcome the negativity generated by the slowing growth in the PND division. Value investors love high dividends.

      It is reasonable to expect that GRMN will continue to pay substantial dividends.

      Mlevine.

      • 1 Reply to mlevine44
      • I got a reply back from investor relations (Min was out snow tubing
        and couldn't respond. I can see him barreling down the
        slopes with bread bags sticking out of the tops of his boots).

        I was wondering about the timing of a dividend since I could
        see several options. The special dividend in April could of
        replaced this December's dividend and we won't see anything
        until December 2011. Or April could be the new month for the
        annual dividend, so we'll have to wait until April 2011. They
        could come up with something totally different. Investor
        Relations (Kerri Thurston) only said they are definitely
        committed to a 2011 dividend and couldn't comment on anything
        else until the Board announces something (When Min gets done
        removing his snow wedgie).

        When we got the April dividend I expected it to take the
        place of December's and wasn't really expecting anything
        else until 12/2011 any ways. Anything more is a bonus to me.

        Can't think of any other time that a company, that has no
        debt, ton of money in the bank and still making money and
        is used to paying a dividend, would stop doing so.

    • GRMN doesnt have a dividend on Nov 27...so no, you won't be getting anything.

 
GRMN
37.26Sep 3 4:00 PMEDT