Q: Hi 5i
Without significant momentum and a lack of a reinstated dividend what catalyst could come along to make CAE a good long term hold or buy?
Is there a good reason why this is still dividend-less ?
Thanks
Without significant momentum and a lack of a reinstated dividend what catalyst could come along to make CAE a good long term hold or buy?
Is there a good reason why this is still dividend-less ?
Thanks
5i Research Answer:
CAE stopped its dividend in the pandemic. Mgmt. has not addressed the issue, but it is likely because (a) we do not think investors were owning CAE for the dividend and (b) debt is still fairly high. Growth could still be a catalyst. It has a large backlog and new contract announcements would help. F2024 (March year end) growth is expected to be above 30% (EPS). Execution has been an issue (it misses estimates about 38% of the time). The stock is up 11% this year and ahead of the TSX. It is also a potential target, considering its global market share and essentially oligopolistic industry position. It has been a frustrating stock, but we think it is worth holding now for its growth recovery.