KARACHI (March 06 2003) : Hub Power Co on Wednesday declared an interim dividend of 33 percent for the six months ended on December 31, 2002, the company said.
The company held a board meeting on Wednesday and announced the dividend.
The company had already released the financial results for the six months ended on December 31, 2002, last month.
Wednesday's announcement came around 10.30 am and the market's response to the announcement was positive, as the scrip remained in positive column.
Zaheeruddin Khalid, head of research at First Capital Securities, said that “we are of the opinion that had the market conditions been better, the scrip would have registered considerable gains”.
He added that this would be the last of the extraordinary dividends by Hubco, as backlog of Wapda payments had ended.
The company is likely to come out with another final dividend of Rs 2-2.25 per share, taking the full year pay out to Rs 5-5.5 per share.
“Going forward, we expect Hubco's dividend to be in the range of Rs 4-4.5 per share starting FY 2004”, Khalid said.
The interim dividend of 33 percent and expectation of another dividend of 25 percent for the full year the yield worked out to be 15 percent based at the current prices of Rs 35.85 a share.
While the recent run up in prices has eliminated the anomaly in Hubco's valuation, we believe that the dividend is likely to gain attraction for some investors, most likely institutions, who hardly have any double digit yielding investment alternative.
However, in our opinion, there are other stocks in the market that are offering similar yields, like Fauji Fertiliser.