Some people on this board seem to have no clue what they are talking about, when it comes to stock buy backs. It is sad, because knowledge is power.
XIN's book value right now is $7.35 a share. If they bought back 5% of their stock, their book value would go up to $7.71 a share, or appreciation of .36 per share. There are 5% fewer shares, so the remaining share are worth more. In the 5% example .36 more.
If XIN gives us a dividend of .10, we get it once, and there is no guarantee we would continue to get a dividend. It is temporary, because is reflects a one time event.
A buy back is long term, a dividend is a one time event that we hope happens again. Your local community college has great 101 type classes for investing. Won't hurt to take one..... or two.......
A lot of brain dead people on this MB but then again what do you expect.
For those few intelligent people that know the score just watch as xin jumps up when they declare a continued div - should be around Aug 24.
Then why did they pay a dividend? The company clearly has enough cash each quarter to pay a dividend. That's why they paid one last quarter. Try to take basic facts into account before posting.
I felt it is some artificial # thrown here. not sure how to you were able to put them together.
I feel this is what most of reasonable investors should be thinking:
if the mgmt believe the LT growth of the firm, and investors believe the growth prospect of the stock better the market, they certainly would put buyback ahead of dividends.
Jeremy Siegel's study on dividends isn't relevant for our discussion here. If you want to be safe, steady-eddie, go for higher yield large-cap stelwarts - XIN isn't one of them. You have to think about growth and/or deep value to consider XIN - obviously the market doesn't believe the growth story in XIN, or in China stocks in general.
>>First of all you're not the only person posting and others have acted as though you can't do a buyback and have a dividend. <<
The last div was on May 26/ I would not be surprised if they announced the same next week or the week after.
That should give us a pop.
1 Stock repurchase = $10m
Assuming the cost to admin the program = 15%
Net amount = $8.5M
No of shares outstanding = approx 80m
After repurchase = 77m
% reduction = approx 3.5%
Assuming a generous 3:1 book value
Theoretical change in price from base (increase) = $2.60 to $2.90
11% increase in pps
$10 reduction in cash
increased exec compensation
Now compare that a c40 annual dividend -
- share increase 25%
- $3m reduction in cash.
Your ignorance is appalling. First of all you're not the only person posting and others have acted as though you can't do a buyback and have a dividend. Second if a company has sufficient earnings a dividend is almost always desirable. You obviously are not familiar with the 30 year study done by Jeremy Segal showing that dividend paying stocks outperform non dividend paying stocks. In the future take your condescending attitude and cram it where the sun don't shine!