Monday, March 16, 2009

EID Parry -div yield 6.7% ,stock up +18%

Dividend announcement reaction. Today EID Parry up +18% from 123 to 150 on announcing div. of Rs 10 per share. at 150, yield works out to 6.7% .that too EID Q3 had a loss of 16 crs & debt of 600 crs vs positve PAT & zero debt for clariant. So why is Clariant Chemicals still at yield of 10.4% ? any guesses ?(see earlier post of Clariant at )I believe it is market inefficiency in pricing value & beta factor.similar reaction for Clariant would mean Clariant would have to rise from cmp of 182 to 284 ( +56% higher) so that dividend yield drops from 10.4% to 6.7%.

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