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Investment Analysis Clubs / The BMW Method

URL:  http://boards.fool.com/and-it-has-a-540-dividend-yield-it-seems-safe-23434351.aspx

Subject:  Re: CAG Date:  12/15/2005  8:40 PM
Author:  CultClassic Number:  10635 of 41627

And it has a 5.40% dividend yield. It seems safe, according to even the lowest analyst estimate at yahoo it should have an EPS of 1.30 (ending in May 2007 apparently?) which would cover the yearly dividend of 1.09. However the company didn't raise its dividend, first time that has happened in 30 years apparently so that might indicate a cut. And the newest earnings came in below expectations.

I think that if you check the dividend is consuming a hefty portion of CAG's FCF. North of 70% if I recall. I don't think that the business can sustain it and make its necessary capital investments for a changing business model. Anyhow, I'm holding on for a cheaper price.

sv
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