Their dividend ratio is historically ~66%. $58.4m divided by 1.17b shares is $0.05 EPS, $0.033 dividends for 2010 - 3.7% of the current SP.
The SP is more likely reflecting future performance rather than 2010 performance...since 2010 performance was a bit boring - smallish profit margin and low production.
Production should be 25% higher in 2011, 2010 nickel prices averaged ~$9.80/lb ($4.50 gross profit margin) while 2011 so far is averaging $11.80/lb ($6.50 gross profit margin) which makes our gross profit margin 44% higher. And then there's the benefit of marginal profit after covering fixed costs. Also we won't have extroatinary expenses from a shutdown and increased workforce.
I think $200m after tax profit is possible for 2011, but $150m being a more safe guess. 46200000 lbs (35,000 tonnes * 60%) * $6.5 gross profit margin ($11.80 average minus $5.30 costs) * 0.67 to remove tax and other minor expenses = $201m after tax. Assuming 66% payout ratio = $0.17 in dividends.
MRE Price at posting:
89.0¢ Sentiment: Buy Disclosure: Held
