A 31% annual dividend yield since 2017
This little cash machine has been FCF positive since 2006, has recent insider buying and an estimated upside of 150%+ to fair value.
Back in 2024, I stumbled across a stock that looked (and remains) cheap.
Dirt cheap.
So, I bought it.
Within six weeks it’d paid me a special dividend that yielded 43%. During the following year the ordinary dividend increased my yield to almost 50%.
The stock price didn’t move much, but it didn’t have to. I was already up 50%, in cash.
I tend to become curious when things spit cash at me.
I discovered, buried in the financial statements, a pattern of stacking cash from operations and paying out special-dividends.
In fact, between 2017 and 2024 it had paid out 4 of these special dividends, alongside its ordinary dividend.
Curiously, this rarely shows up on scanners and screeners. They only tend to show the yield from ordinary-dividends.
The business has been free-cash-flow positive since 2006 and consistently generates an average of $48mn per year for its owners.
Right now, you can buy the entire business for less than $200mn.
At the current price, the average dividend yield since 2017 (Inc. the specials) is over 31% per year!
It also happens to be trading below the value of its tangible assets (TBV ratio of 0.8) while holding 70% of its market-cap in cash.
It trades at just 3.8x earnings and its EV/FCF ratio is just 1.2.
It has zero debt.
This is the kind of stock that beats the market, even if the price never moves.
Of course, it will.
They always do, eventually.
When it does, I estimate that this particular stock has around 159% upside to its fair value price (conservatively calculated).
Even in the parallel universe that is deep-value investing, these kinds of anomalies are extremely rare.
The best part is that this opportunity is still open to anyone interested.
Here’s the story: