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Strategies & Market Trends : Contrarian Investing
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To: pcyhuang who wrote ()9/10/2006 3:52:26 AM
From: bruwin  Read Replies (1) of 4080
 
I must say, one doesn't often see a company pay out more in DPS than it reports as EPS !
Its TTM DPS is 132c, and its Basic TTM EPS is 116c.
That's a Dividend Cover of 116/132=0.88 < 1 !!
You have to wonder for how much longer NTE can keep that up ?
IMO, Dividend Covers of between 2 and 3 are good to see in a company's Financial Reports.

Using the after tax, 1 Year US Money Market Interest rate as a yard stick, and combining it with the above numbers, I calculate NTE's P/E to be about 35.
At a current TTM P/E of 10.1 it could be regarded as "undervalued".

However, that Dividend Cover number worries me ...
Maybe it has also contributed, in some way, to NTE's over 40% fall off in its stock price in the last 2 months.

Best wishes with your new "Contrarian Investing" Board !
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