This company has the installed asset base and internal resources to generate EBIT of $8m to $9m pa (compared to FY2018's $1.9m).
EBIT of, say, $8m will translate into EPS of between 40cps and 45cps.
With the company currently sitting on near-record net cash levels, and with some 68cps in franking credits, it is highly likely that the board will distribute all earnings as dividends.
This implies a 15% prospective dividend at some stage over the next 2 or 3 years, which is when KOV's earnings could see their next cyclical peak.
In the interim, I think a first-half dividend of 9cps is certainly on the cards, and I would not at all be surprised if it exceeded 10cps.
KOV Price at posting:
$2.59 Sentiment: Buy Disclosure: Held
