a rare thing: directors that simply "get it"

Many years ago, I was under the mentorship of a very wise investment manager who taught me that the definition of an investment is something the "puts money into shareholder pockets, as opposed to taking it out".

By that defintion, KOV is clearly classified as an investment grade company:

Today the KOV board has declared a 100% increase in the final dividend to 30cps, and has also annunced a further 5cps special dividend. Moreover, the dividend policy has been revised to 100% payout ratio going forward.

That's some vote of confidence in the buisness model, the cash generating qualities of the company, and the pristine quality of the balance sheet.

It puts the stock on an 11% fully franked Dividend Yield (12.5% including the special dividend)

Over the past 7 years that I've been a shareholder, this company has paid almost $2.50 per share in dividends. Not too shabby considering the stock price was around $4.50 prior to the release of the result today.

Far too often, boards of drectors don't understand how to avoid destroying shareholder value, and too seldom do they truly understand the mechanics of creating shareholder value, let alone apply them in a disciplined, rudential manner.

This is not a world-class business by any measure, yet the directors have still managed to generate sensational returns to shareholder through all stages of the business cycle. The have never been tempted to do anything stupid, such as make heroic acquisitions or undertake grand global empire building exercises.

They have simply always run the business conservatively, with a disciplined control of operating costs, a focus on servng customers well, and have always maintained the balance sheet in pristine condition.

Shareholders cannot have asked for more...it's a rare thing: a board of directors that simply "Get It".