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UTair airline's supervisory board has recommended that an AGM approve a dividend payout of USD 5.4 mn. The dividend yield on the shares is to remain low, at about 1.5%. Given the airline's large-scale investment program, targeted at upgrading its aircraft fleet, we do not expect a sizeable spike in dividend payouts by the airline in the foreseeable future. Our estimates show that the news is unlikely to exert a tangible impact on the company's stock valuations.
UTair airline's supervisory board on May 28 recommended that an AGM approve a dividend payout of about USD 5.4 mn (RUB 127 mn), or USD 0.0097 (23 kopeks) per share. The recommended payout stands at 30% of the company's net profit audited to RAS.
In our view, the approved payout is in general neutral for investors: The company expects to earmark up to a third of its total profit for dividends notwithstanding its current hefty capital investments, yet the dividend yield on the shares remains at a modest level of about 1.5%.
Taking into account the air carrier's large-scale investment program, aimed at upgrading its aircraft fleet, we do not expect a sizeable spike in dividend payouts in the foreseeable future. The program was necessitated by the need to enhance the aircraft fleet's fuel efficiency amid surging jet fuel prices. Out target price for UTair common stock is USD 1.16 per share, with an upside potential of 70%. Vladimir Sergievskiy
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UTair
Capitalization: $132 757 840,00
Common shares:
Price: $0,23
Delta week: -19,9%
Delta month: -49,0%
Delta year: -61,5%
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11.8
12.74
