What are your views on Acadian Timber Corp

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What are your views on Acadian timber corp.
Is dividend safe?
While checking on Yahoo Finance under ADN.TO statistics, I noticed it is mentioned Payout Ratio of 282.93% and couldn’t digest
and not sure how reliable is this info.
Will wait to hear from you guys.

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Asked on August 25, 2020 11:40 am
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Hey there Shail. As you can see on Yahoo, Acadian has earnings per share of around $0.42, but is paying a dividend of $1.16. Dividend coverage ratio for the company is also poor.

If I see something like this, I typically head to the balance sheet to see how liquid the company is. And as it turns out, they have a pretty poor balance sheet as well. Current liabilities (money due in the next 12 months) is almost 4 times the company's current assets (cash or assets that can be turned into cash within 12 months.)

Even in the company's most recent quarterly report, it said it generated negative free cash flows of $200,000 yet issued dividends of $4.8 million. It stated this was due to weather, but a few too many of these and it only gets worse.

To answer your question on whether or not the dividend is safe, it's a pretty firm no from me.

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Posted by Dan Kent
Answered on August 25, 2020 3:05 pm