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Research Flash - Algoma Central Corporation (ALC:TSX, $16.10|BUY $25.00 TARGET) - Quarterly Dividend Increased To $0.18

Algoma Central Corporation announced an increase to the quarterly dividend of $0.01 or ~6% per common share on January 13th, 2023. The quarterly dividend now stands at $0.18 per common share (up from $0.17). The dividend is yet another example of how ALC consistently returns capital to shareholders in the form of dividends and the occasional special dividend. With the increase the dividend yield now increases to ~4.45%. On December 14th, 2022, ALC announced that the board had authorized the declaration of a special dividend to shareholders in the amount of $1.35 per common share. We are maintaining our price target of $25.00.


Special Dividend

The special divided was announced on December 14th, 2022, and came as a reward to shareholders of ALC in the amount of $1.35 per common share. The dividend is payable on January 18th,2023, to shareholders of record on January 4th, 2023. The total cash cost of the dividend is $51.037M, and leaves approximately $85.6M of cash on the balance sheet.


Our Thoughts

The increase to the dividend proves shows ALC’s commitment to returning capital to shareholders on a regular basis. Additionally, shareholders can expect to be rewarded with special dividends from time to time when the balance sheet permits such dividends. We are maintaining our price target of $25.00, and expect ALC to continue operating with full, or near full fleet utilization.

20230113- M Partners - ALC - Quarterly Dividend Increase
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