Daily analyst comments
Magnit to make first-ever dividend payments
29.06.09 10:09
We are upbeat on Magnit’s intention to make its first-ever dividend payments. However, the company’s current dividend yield is still extremely low.
At an AGM held on June 25, 2009, shareholders of retail chain Magnit (RTS: MGNT) authorized the company’s first-ever dividend payment. Magnit is to pay out a total of RUB 517.8 million: RUB 121.54 million, or RUB 1.46 per share, for FY 2008, and RUB 396.25 million, or RUB 4.76 per share, for 1Q 2009. Therefore, the company is to allocate about 2.6% of its FY 2008 net profit and 30% of 1Q 09 net profit to dividend payouts. June 25, 2009 was the dividend cutoff date.
Despite an extremely low dividend yield of 0.5%, we are positive about Magnit’s intention to make its first-ever dividend payment as this could contribute to the company’s investment appeal in the future.
We retain a positive long-term view on the retail chain. The fair value of Magnit is USD 42.70 per share with a 12% upside.