Lee Metal at least 6% dividends since 2009!!

by SG Stocks And Shares · March 2, 2017

been looking ard for something other than Banking shares. In fact, bank shares are a little too high for now. Lee Metal issues about 6% dividends or more constantly. Certainly better than some blue-chip shares. Noticed this as the volume has been increasing and chart wise it has been moving out of the down channel for a while.

I compiled some info for referencing. Available for CPF investing too.

Profitable since 2005 (that’s as far as I can go from the 2009 annual report)
Despite being in a cyclical industry, Lee Metal has been profitable since 2005, even in 2008/2009.

S$m	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
Sales	690.3	1,112.5	1,537.7	1,471.4	983.9	831.5	773.6	696.2	635.9	519.3	445.4	318.6
Net profit	7.1	10.3	15.5	20.4	29.9	22.5	18.9	26.9	40.2	33.1	15.6	13.3
EPS	0.020	0.025	0.035	0.040	0.058	0.048	0.040	0.057	0.085	0.070	0.033	0.028
DPS	0.002	0.018	0.012	0.013	0.030	0.025	0.020	0.025	0.035	0.030	0.020	0.020
payout	10.2%	71.1%	34.0%	32.6%	51.7%	52.1%	50.1%	44.1%	41.4%	43.0%	61.0%	71.2%

STRONG free cash flow generation yield of more than 20%!! In the last 3 years
While profit has declined with the tough environment, FCF yield has remained at least 9% in the last 5 years. For FY16, generated 20% free cash flow yield!!!

	2012	2013	2014	2015	2016
OCF	63.5	23.7	43.6	74.1	31.1
Capex	(13.0)	(10.7)	(5.5)	(19.9)	(2.8)
FCF	50.5	13.0	38.1	54.3	28.3
PBT	32.0	47.9	37.6	18.4	14.8
Dep	4.9	7.0	10.1	11.8	10.7

FCF yield	36.1%	9.3%	27.2%	38.8%	20.2%
FCF/share	0.106	0.027	0.080	0.114	0.060

With its strong cash flow generation- has moved from net debt of S$80m in 2013 to net cash of S$8.5m in just 3 years, and that is while paying S$0.085 of dividends in total from 2013-2015!

	2012	2013	2014	2015	2016
cash	25.2	50.0	46.1	68.7	69.1
fixed deposit	48.7	65.2	42.9	27.8	28.8
debt	(139.2)	(195.8)	(142.5)	(105.3)	(89.3)
net cash	(65.2)	(80.7)	(53.5)	(8.9)	8.5

Good pay master
Has been constantly paying out dividends. While DPS was cut in 2015, it still translates to 6.8% yield.

	2012	2013	2014	2015	2016
DPS	0.0250	0.0350	0.0300	0.0200	0.0200
EPS	0.0567	0.0846	0.0698	0.0328	0.0281
payout	44.1%	41.4%	43.0%	61.0%	71.2%

FCF yield	36.1%	9.3%	27.2%	38.8%	20.2%
FCF/share	0.106	0.027	0.080	0.114	0.060
dividend yield	8.5%	11.9%	10.2%	6.8%	6.8%

Improving outlook?- is the worst over? , coming off a low base?

We note that profit has dropped from S$40m in 2013 to S$13.3m in 2016. (although we note that part of it is due to higher depreciation expense (non-cash)) . 2017 construction demand is expected to be between $28b-35b , similar to 2016 of $27b-34b. + Steel prices have been on the rise…

Valuations: Currently trading at 10.5x PE, not cheap. But given the strong free cash flow generation and good dividend yield and excellent track record of earnings. Believe it is worth a look (esp with the volume in the chart see next few pages)

Daily chart- interesting surge in volume with prices remaining stable between S$0.29-0.295.

Weekly chart

Look at the long monthly tails in 2015- breakout to S$0.355

Dividend Payouts over the last 10 years

Dividend Yield(TTM) = 6.90%

Year	Yield	Amount	Ex Date	Pay Date	Particulars
2017	3.45%	SGD 0.01	2017-04-26	2017-05-22	SGD 0.01 ONE-TIER TAX
2016	6.90%	SGD 0.003	2016-11-21	2016-12-09	SGD 0.003 ONE-TIER TAX
		SGD 0.005	2016-08-31	2016-09-15	SGD 0.005 ONE-TIER TAX
		SGD 0.002	2016-06-08	2016-06-24	SGD 0.002 ONE-TIER TAX
		SGD 0.01	2016-04-27	2016-05-23	SGD 0.01 ONE-TIER TAX
2015	6.90%	SGD 0.003	2015-11-23	2015-12-11	SGD 0.003 ONE-TIER TAX
		SGD 0.005	2015-09-01	2015-09-16	SGD 0.005 ONE-TIER TAX
		SGD 0.002	2015-06-08	2015-06-24	SGD 0.002 ONE-TIER TAX
		SGD 0.01	2015-04-28	2015-05-22	SGD 0.01 ONE-TIER TAX
2014	12.07%	SGD 0.003	2014-11-24	2014-12-12	SGD 0.003 ONE-TIER TAX
		SGD 0.005	2014-09-01	2014-09-16	SGD 0.005 ONE-TIER TAX
		SGD 0.002	2014-06-06	2014-06-24	SGD 0.002 ONE-TIER TAX
		SGD 0.01	2014-04-28	2014-05-23	SGD 0.01 ONE-TIER TAX
		SGD 0.015	2014-04-28	2014-05-23	SGD 0.015 ONE-TIER TAX
2013	8.62%	SGD 0.003	2013-11-25	2013-12-13	SGD 0.003 ONE-TIER TAX
		SGD 0.005	2013-08-30	2013-09-16	SGD 0.005 ONE-TIER TAX
		SGD 0.002	2013-06-06	2013-06-24	SGD 0.002 ONE-TIER TAX
		SGD 0.005	2013-04-30	2013-05-23	SGD 0.005 ONE-TIER TAX
		SGD 0.01	2013-04-30	2013-05-23	SGD 0.01 ONE-TIER TAX
2012	6.90%	SGD 0.003	2012-11-23	2012-12-14	SGD 0.003 ONE-TIER TAX
		SGD 0.005	2012-08-29	2012-09-14	SGD 0.005 ONE-TIER TAX
		SGD 0.002	2012-06-05	2012-06-22	SGD 0.002 ONE-TIER TAX
		SGD 0.01	2012-05-03	2012-05-25	SGD 0.01 ONE-TIER TAX
2011	8.62%	SGD 0.003	2011-11-29	2011-12-16	SGD 0.003 ONE-TIER TAX
		SGD 0.005	2011-08-29	2011-09-16	SGD 0.005 ONE-TIER TAX
		SGD 0.002	2011-06-07	2011-06-24	SGD 0.002 ONE-TIER TAX
		SGD 0.01	2011-05-03	2011-05-27	SGD 0.01 ONE-TIER TAX
		SGD 0.005	2011-05-03	2011-05-27	SGD 0.005 ONE-TIER TAX
2010	6.90%	SGD 0.003	2010-11-29	2010-12-17	THIRD SGD 0.003 ONE-TIER TAX
		SGD 0.005	2010-08-30	2010-09-17	SGD 0.005 ONE-TIER TAX
		SGD 0.002	2010-06-14	2010-06-25	FIRST INTERIM SGD 0.002 ONE-TIER TAX
		SGD 0.01	2010-05-03	2010-05-27	SGD 0.01 ONE-TIER TAX
2009	6.90%	SGD 0.003	2009-11-26	2009-12-18	THIRD INTERIM SGD 0.003 ONE-TIER TAX
		SGD 0.005	2009-08-21	2009-09-11	SGD 0.005 ONE-TIER TAX
		SGD 0.002	2009-06-08	2009-06-25	SGD 0.002 ONE-TIER TAX
		SGD 0.01	2009-04-30	2009-05-28	SGD 0.01 ONE-TIER TAX
2008	4.48%	SGD 0.003	2008-08-21	2008-09-12	SGD 0.003 ONE-TIER TAX
		-	2008-08-11	-	1 WT FOR 5 SH OFFER OF 1 FOR 5 @ SGD 0.05
		SGD 0.01	2008-04-25	2008-05-15	SGD 0.01 ONE-TIER TAX
2007	3.45%	SGD 0.002	2007-08-20	2007-09-05	(LST INTERIM) SGD 0.002 LESS TAX
2007	3.45%	SGD 0.008	2007-04-27	2007-05-16	SGD 0.008 LESS TAX

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Lee Metal at least 6% dividends since 2009!!

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