Colabor Group Inc - TSE:GCL

[herrM]

Nice dividend on this one - 9.42%

There has to be something wrong? Anyone have any info on this one?


Thanks

http://www.google.ca/finance?q=TSE:GCL

[doctrine]

Let's do some basic financial analysis that I have learned over the last year and see how it pans out. Looking at their Q3 filings:

http://corpo.colabor.com/PDF/Colabor_EF_2011_Q3-A.pdf

-They had a huge number of convertible debentures come due in the last year (20% of stock), so dilution has been realized
-Revenues are up but net income does not look good
-They are paying out 102% of cash flow in dividends
-Their net income in the first 3 quarters of 2011 is only $0.21 per share, which means their dividend payout ratio is 280%
-Their best quarter is Q4 so it may not be as bad as that but its not going to make them net profitable

So they're paying out everything they're making..you probably won't get any dividend increases, or much capital gain, but get a huge payout.

I had them on a watchlist because of their dividend but generally I don't buy companies whose dividend payout ratio is more than 100% of net income over a year. I didn't do this much analysis so now I will make a note of my comments and check back in a year or two.