I looked at KMD over the lockdown and had trouble with my weighing scales. Specifically there wasn’t enough information to make a decision and it was all a bit of a gamble. I decided at the time that they were not a good purchase for me. I think that was the right decision at the time, based on the lack of information I had with which to make an analysis.
Returning to have another look at KMD, there is now enough information to do a bare bones price check (which is all I will do, as I’m not currently in a position to buy more shares after a recent purchase of some HLG and MFT shares and some upcoming building repairs on my house. Additionally, I’ve got other plans for my day today).
Let’s dive right in!
Market capitalization currently sits at $1,092m with a share price of $1.54.
HY Underlying NPAT of $23.1m (up 32% from the previous year)
Looking at 2019’s stats (the last “normal” full year we’ve had), it seems that HY NPAT is generally about a quarter of the FY NPAT. From this we might take a punt that this FY will be about $80m NPAT. That puts KMD at a PE of about 13.7 (excluding considerations for cash on hand).
The dividend looks good too, and will likely be above 5% after tax this year.
Without looking too deeply I would imagine that the current dividend is lower to give the company the opportunity to recover from COVID a little – they may require some Retained Earnings on their balance sheet.
I expect buying at todays prices ($1.54) will mean a 9% dividend by the end of FY22. KMD is back on my list to buy, but I don’t think they’ll stay at this price for long.