Stelco could rise on dividend hike: good financials could mean a higher payout

Money Digest, August, 1998 by Andrew Goetz

Will Stelco increase its dividend? The company has called 75% of its preferred shares. And presently it has projected earnings of $1.12 per share.

Stelco pays a $0.12 dividend. But with a p/e ratio under nine, pipe contracts well into 1999, and the preferred share overhang mostly gone, a dividend increase looks probable.

With an increase, what is the target? Fifteen dollars seems reasonable since an increase would encourage existing shareholders not to sell. Fifteen isn't bad given the stock presently sells for $10.50.

Andrew Goetz, B.A., B. Comm. is an investment advisor with Goepel McDermid in the Hamilton, ON, office. Phone (905) 974-2920.