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Southern Copper Corp. Message Board

  • ramstocks ramstocks Oct 17, 2013 10:17 AM Flag

    Is dividend still variable or have they set it at 1.7% of current price

    Does anyone know if SCCO intend to continue to alter dividend from quarter to quarter or is the new low rate "permanent"?

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    • Yes. It's permanent for 3 months. 12 more cents per share coming in November.

    • It will still be variable. It's the easiest way to get the money out of the country.

    • stock price went as far as it could with a high rate so unless the majority stockholders have any say they did some one a favor. owners and operators with with large stock holdings like the extra money so they are likely to want a change

      • 1 Reply to airlinemusic
      • The majority stockholder (GRUPO) can do almost anything they want with the dividend payout.

        That being said, the dividend will likely remain low due to SCCO's planned capex spending. Several things can impact GRUPO's dividend decisions but, IMHO unless either a better investment presents itself to GRUPO or there is a large infusion of cash (from ????) the dividend will likely remain low until capex requirements are met. Other LESS LIKELY circumstances (i.e huge profits, cancelling of capex plans due to ???? etc.) could impact the above statement but this would likely be dependent on unforeseen situations over which GRUPO has little or no control.

        At this point its a matter of "pay me now or pay me more later (hopefully)" ..... so, if you're in SCCO for the dividend payout you're likely to be disappointed.

        Ask yourself ...... if you owned almost all of SCCO, and you were CONFIDENT in the long-term future of your business, would you cut the dividend to finance YOUR planned expansion of YOUR business or would you go to the capital market to finance your expansion plans and give a percentage of your profits to a banker? This is especially true in an environment where you have no better place to invest your dividend payouts .... a place that generates more than enough profit to offset the interest charges you would have to pay the lender(s).

        Lastly, if you were the smartest gambler in the world AND you could lock-in low interest long-term loans in the anticipation of much higher future interest rates you may want to take a risk ...... but that's no way to run a business ..... unless you can control future interest rates (can anyone say FED and its owners). Remember, the objective of a banker is to get you in as much debt as possible as long as you continue to make the payments ..... can anyone say "sucker" (i.e. the U.S. government at a rate of about $25 billion a month).

        Some of this post is intended to throw out a little bait in hopes a fish will bite.

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