Q: Can I get your short and long term view as well as your opinion on dividend security and growth?
5i Research Answer:
CHE did cut its dividend in half in 2020. Prior to that, it had not changed it in at least 10 years. It is not our favourite company: it has not created value, it is in a cyclical industry, it has a leveraged balance sheet (admittedly improving, but still 2X cash flow) and not much growth. On a per share basis, EPS forecasted for 2024 is barely above 2014 levels and below 2009 to 2012 levels. The dividend is likely OK now, with payout ratio less than 20%. Earnings bounce around, and the stock is very cheap because of this (and the aforementioned factors) at 5X earnings. But it just not have the good qualities we are looking for in a company, including marginal insider ownership.