Is a gain of 3.21% in a single trading day any good for us longs? :-)
Joking aside... My theory on the discussion of when/whether/if CODI raises their dividend payouts in the future is that CODI is tied to FOX much like LIBERTY MEDIA is tied to the fortunes of SIRIUS XM.
FOX looks like CODI's biggest investment even in spite of the fact they sold off a chunk of their ownership in their IPO release. So, if FOX ever decides to raise their dividend pay outs based on future growth targets then likewise CODI will have more money to raise their own dividend pay outs.
CODI isn't as already been mentioned going to raise dividend payouts unless they can afford it. They appear to have emerged to a point where they are taking in more than they are paying out when the reverse was true for so long. To up the divis to a point where you are back in the red so soon is stupid financial management.
But, it seems like as FOX share price rises.....as FOX's financial fortunes improve.... So goes CODI.
They can either take the money and invest in another business.... Or they can increase Dividends. But, the sure fire safest way to increase dividends is to tie them directly to FOX's pay outs.
Considering that CODI retains 54% of the Fox shares, CODI can do anything it wants as far as the size/frequency of Fox dividends..I would be surprised at this point to see a significant FOX dividend because FOX is in a growth mode requiring reinvesting. Let's also understand that the CODI external mgmt group is getting hefty bonus payments related to the Fox IPO. I feel that the unit holders also deserve some of the cheese,too, either in the form of a special cash dividend or a rise in the dividend to,let's say, $1.60/ year. Either can be easily funded by selling some of the almost 20 million FOX shares that CODI retained.i
As long as CODI remains maintains majority control of FOX, I am ok with them selling back some of the shares. But, they can't use the proceeds to do a long term boost to dividend. Only a one time special dividend...Since that would just be a one time event for them.
I much prefer they use the proceeds to invest in a small growth company instead and use the revenues from that business, as it grows, to boost the dividend long term rather than fritter it away on a special dividend pay out.