At time of writing, Sigma Healthcare Limited [ASX:SIG] shares are trading at 56 cents a piece, which marks a 5.04% climb from yesterday’s harsh plummet.
By closing of the market yesterday, Sigma was trading at over an 11% decrease. This drop coincided with the abysmal half-year results that were released on the ASX early yesterday morning.
Figures revealed a 50.6% drop in NPAT from FY17 to FY18. And this isn’t the only ‘down’ that was reported.
And yet, they’ve managed to halve this price decline in only 24 hours.
Sigma remain faithful to the dividend
In their half year results presentation, it was shown that despite their troubling profit figures, Sigma was able to maintain their high dividend payout ratio. An additional dividend distribution announcement was posted on the ASX, alongside the results presentation, confirming this.
They managed to secure an interim dividend of 1.5 cents per share, which will be payable on 29 October 2018. The ex-dividend date is 12 October. Any shares purchased after this date won’t be recognised for the dividend payout.
It seems, then, that with this ex-dividend date fast approaching, investors are wanting to take their slice of the payout by getting their hands on some shares. That would help explain the sudden spike in share price.
Does the road ahead look promising for Sigma?
It can’t be denied that the half-year results were disappointing. However, a dividend payout tends to reflect a company’s confidence in their future potential.
During the 2008 financial crisis, banks slashed their dividend payouts in an effort to protect their funds. These stocks were known for their reliability and consistent payouts, but in a moment of panic, this reliability went out the window.
So, for Sigma to still be honouring their dividend distribution suggests they still see growth in the future.
And the company emphasised yesterday it’s confident that it’s still on track for FY19 underlying EBIT of $75 million.
Investors hope that this will be the case.
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PS: Sigma has managed to dig themselves halfway out of their rut, because they are confident in the company’s future. But with a potential ‘Global Financial Crisis 2018’ looming, it may be harder than they think to reach that target EBIT. Financial expert Vern Gowdie explores why he believes a credit collapse could occur in 2018, and how you could protect your assets. Click here for a free action plan.