Good news for Carib Cement shareholders?

Good news for Carib Cement shareholders?

Caribbean Cement Company’s announcement that it will be paying out dividends after a 17 hiatus has been met with mixed reactions from some analysts.

Carib Cement, Jamaica’s largest manufacturer of cement, recently announced that it plans to shell out more than $1 billion in dividend payments to shareholders in August. The company said that it would be recommending a dividend payment of J$1.5032 per share at its next Annual General Meeting.

If approved, this would be Carib Cement’s first dividend payout in 17 years; the last payout being in 2005.

Speaking on Taking Stock with Kalilah Reynolds, Co-founder of Learn, Grow, Invest, Jermaine McDonald welcomed the news but noted that it did not go far enough.

McDonald noted that the dividend yield, based on the stock closing price as of May 10, just over two percent.

“Based on just the anticipation, everything that led up to this point, I personally would have hoped they would have done a better dividend,” he said.

He did note, however, that the announcement has provided positive movement in the stock that many shareholders have been waiting on.

The stock which is listed on the Main Market of the Jamaica Stock Exchange (JSE) ended trading on Friday at $68.95, up from $60.40 the previous week.

The news spurred some life into the company’s stock price, which had been steadily declining since last year. The stock price is down 1.29 percent year-to-date.

The stock fell some 25 percent back in November after it was revealed that the company would have to start paying royalties to parent company Cemex– Cemento Mexico to use its trademarks and other intellectual property.

Shortly afterward the company announced that it would be raising its prices by eight percent; the price increase took effect in January.

According to the company’s Q1 results, it paid roughly two percent of its overall revenue or $133 million in royalty fees to Cemex and also faced a major hit in the costs of electricity and fuel.

The company had also previously listed the increase in fuel prices, caused by the COVID-19 pandemic, as one of the main reasons for January’s price increase.

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Sashell Williams2024-09-03T21:40:31-05:00