Q: Acadian Timber (ADN) has come up on my radar. In your assessment, how safe is it's dividend?
5i Research Answer:
Its payout ratio is high, but it has been declining, and if needed, the company can use some of its cash or additional debt to continue its dividend payments. Its interest expenses are not overly burdensome on its earnings, and we feel that it is at a good value today at a 6.9% yield and price to book of less than 1X. Sales growth is modest but is expected to pick up next year.