Message Font: Serif | Sans-Serif
 
No. of Recommendations: 2
There is much to agree with here, but some of the numbers don't make sense. If they really are trading at 3 times earnings (Yahoo says 3.76, but let's not quibble), then there is about a 30% earnings yield, taking the average of those two numbers. If it really has a 6-7% dividend rate (Yahoo says it is 5.32%), then that is nowhere near a 78% payout rate, and would be in no danger of being cut.

Mungofitch figured it out. They’ve already cut the dividend to 5¢ a quarter, down from 19¢ in 2018. I’m guessing Yahoo Finance’s source code doesn’t account for that case. (This is also why I cite my sources.)

20¢ a year would mean I’d need 15 years (ish) to get my money back at today’s price, assuming no further cuts or increases. I’m not confident PBI will be in business in 15 years. I’m quite sure I can do better than this rate of return.

I’m not terribly confident about a liquidation case. Have you ever heard of a public company liquidating? They hang on like grim death.

I still think the best play on this cigar butt is the short squeeze scenario.

Regards,

- HCF
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.