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Frontline Ltd. Message Board

  • mdparker3 mdparker3 Jun 16, 2008 5:23 PM Flag

    Dividends

    How can they give out more in dividends than they make per share? Their EPS is $8.45/share and their Dividend is 11.00/share. Any help on this subject would be grate.

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    • This is one of the hottest stocks out there. The dividends speak for the confidence.

      Tankers will soon be a superhighway fot he deep seas. Common sense, this will only go up for years. Buy and hold and you'll be happy, No one can argue except for those not familiar with how the market works.

    • You might also look at their cash flow and their cash on the balance sheet. When it comes to dividends, cash flow is more important than profits; a company can have strong profits but no cash to pay a dividend just as it can have strong cash flow to pay dividends but not be making an operating profit. As for the cash on the balance sheet part of dividend payments, I believe that, in 2007, FRO paid out some of its excess cash from profits in previous years, which boosted dividends higher than operating profits for the year. Based on their current cash position, I expect that in 2008 they will build up their cash position, as cash flow is strong. This way, they can pay out higher dividends in future years even if profits are off somewhat. They will do this by doing exactly as they did in Q1 - by paying out a dividend that is slightly lower than their operating profits. FRO is mindful of its need to pay strong dividends in the short-to-medium term (and they say as much in their most recent 10-K); that was actually one of the driving forces behind their (now former) interest in acquiring OSG. By "smoothing" their dividend payments in the manner I described, they are sometimes able to pay dividends that are higher than their operating profits for that particular year. I hope this sheds some light on your question; I've spent a good deal of time examining this very fact myself.

    • Three words. Men's Hair Club.

    • The Dividend Is 2.75$ 1st Qtr. They made over 3 dollars a share in that quarter. Good Luck.

 
FRO
2.05-0.20(-8.89%)Aug 29 4:02 PMEDT

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