Sunday, March 15, 2009

Clariant Chemicals - a +11% dividend yield play


Clariant Chemicals - a dividend play-+20% upside in a month
event on 23rd Feb `09 --19 Rs per share div declared.
on 23rd Feb 09
cmp -165.Mkt cap 440 crs
1st s.t tgt 200 by end march`09. (+20% upside from cmp of 165)
  • Business - color chemicals n dyes for textiles,construction,leather,auto
  • Did more backtesting on clariant chem.Rewind to last year 2008. had announced 10 rs per share div. in Feb`08.ex-date was 31st Mar`08.see the above price chart movement -just 1 week before going ex-dividend. ( a 12% pop from 230 to 257, on a div. yield of just 4.3% (10/230) in last year. This year ,div yield now is 11.5% ( 19/165), so a similar pop to at least 200 by end Mar`09 is very likely)
Price in 2nd Feb`08-pre dividend. was 240.
price in 20th Feb`08-post 10 rs dividend. was 255.
from 20th Feb`08 to 31 mar`08 - COLCHE price had dropped just 6% vs sensex fall of 20%.
so COLCHE outperformed sensex by 3 times from the period of declaring div.(20 Feb) to ex-date of div ( 31 Mar)
that too div. yield was just 4% ( 10/240).
this time div is 19 per share ,div yield is 11%. so definitely expect Clariant to outperform sensex till 31 Mar `09.
div growth CAGR of 37% from 2002 to 2009 is amazing, from 7 crs in 2002 to 55 crs in 2009. current PE of 6 ( mkt cap 440 crs / 68 crs CY08 PAT ) is definitely not taking into account the div growth amazing fact.

disclosure : i hold Clariant Chem.

Positives
  1. zero debt
  2. 12 months ,CY 08 Sales of 950 crs up 1%. PAT 67 crs up 100% . Cash PAT wud be 100 crs due to depreciation of 30 crs ( that is a non cash expense).
  3. from last yr bal. sheet. cash 15 crs. Net current assets of 112 crs.
  4. current valuation ratios are at an all time low. PE 6. .PSR (price to sales) = 0.5. EV/EBIDTA of 4.0. but dividend is all time high 19 vs 10 per share.
  5. Historic Valuation Ratios
    ParticularsDec 2007Dec 2006Mar 2006Mar 2005Mar 2004
    Year End200712200612200603200503200403
    Price Earning (P/E)32.1625.8010.6120.188.81
    Price to Book Value ( P/BV)2.832.901.211.711.75
    Price/Cash EPS (P/CEPS)18.0021.666.3311.306.29
    EV/EBIDTA11.6712.694.537.427.28
    Market Cap/Sales0.921.190.410.720.69
  6. lastly - corrected from high of 300 to 145. so cmp of 165 is decent entry level.
  7. on friday 20th Feb`09, div declaration date. - stock closed up 5% at 165 on 4 lac shares (up 10x the 2 week avg volumes). delivery volumes were 22%.
only slight - ve is Dec qtr results PAT was down 90%. (but that was mainly due to high depreciation. cash PAT was down lesser maybe at 25%) & globally Swiss co. clariant has cut dividend so future dividend not sure.

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