Friday, 28 September 2012

Analyst Asks – Will Carfinco Increase Its Monthly Dividend?

TSX: CFN
Shares outstanding: 24.65 million
Shares fully diluted: 24.65 million
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There is no question that Carfinco is a compelling growth story with a solid dividend. Currently the dividend is about 4.6% with a $0.035 dividend paid monthly amounting to $0.42 annually.

Analyst Fred Westra of Industrial Alliance has been bullishly covering Carfinco since early 2010.

He believes the company may increase its dividend before year-end. In an updated report released on September 25th, Mr. Westra states that with a current payout ratio of only 45%, he believes there is flexibility to support both dividend increases and retain earnings.

He also noted that if Carfinco were to hit its $12.00 target price, it would still remain a desirable income play with a yield of 3.5%, even without an increase in dividend.