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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.


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