Good morning. I look at the dividends and payout ratio. I can get my head around Chevron, the 120% payout is a result of non cash expenses which in Oil and Gas is obvious depreciation. Why though would Lamar have a 120% payout?
Curious how much of FCF is being used to cover dividends in both these stocks. That it seems will provide a better measure of dividend safety? Am I thinking about this correctly? Would appreciate any feedback.
Very simple - it’s a data entry or copy/paste error :) Lennar has a payout ratio of under 30%. Thanks for the catch!
On FCF, generally it’s a great metric to use, but it always depends on the business. For a company like Lennar, they lay out a lot of cash upfront to pay for developing land, building homes, etc. They only recognize cash when a home is closed and the mortgage lender funds the purchase. So depending on development and sale timing, it can look very lumpy.
Thanks for putting this very through overview of the Buffett portfolio. He has an amazing track record of outperformance just using common sense and long term thinking.
It would actually be interested to see the shareholder yield for each of these i.e. dividends + buybacks. I suspect this would throw up some interesting results.
Good morning. I look at the dividends and payout ratio. I can get my head around Chevron, the 120% payout is a result of non cash expenses which in Oil and Gas is obvious depreciation. Why though would Lamar have a 120% payout?
Curious how much of FCF is being used to cover dividends in both these stocks. That it seems will provide a better measure of dividend safety? Am I thinking about this correctly? Would appreciate any feedback.
Very simple - it’s a data entry or copy/paste error :) Lennar has a payout ratio of under 30%. Thanks for the catch!
On FCF, generally it’s a great metric to use, but it always depends on the business. For a company like Lennar, they lay out a lot of cash upfront to pay for developing land, building homes, etc. They only recognize cash when a home is closed and the mortgage lender funds the purchase. So depending on development and sale timing, it can look very lumpy.
Thanks for putting this very through overview of the Buffett portfolio. He has an amazing track record of outperformance just using common sense and long term thinking.
It would actually be interested to see the shareholder yield for each of these i.e. dividends + buybacks. I suspect this would throw up some interesting results.