That’s obvious and I’m not trying to understand how dividend payment helps ROE of a company.
My point was that dividend payment should the last option for the companies when they don’t have any use for the capital. So it’s fine for a company, generating loads of operating cash flows, to give dividends for lack of better opportunity for that capital.
For financial companies, capital is the key raw material and continuous supply of it is key to their operations. So if Aptus is raising capital from the market, market would expect them to put that to work and generate interest income and not pay dividend to boost ROE. If they didn’t have opportunity for that capital then why raise it in the first place and expand their balance sheet?
And the most importantly, improve ROE to what end? Such inorganic tactics to improve ROE are not lost on the market and won’t benefit stock prices if company is not delivering on core operating metrics.
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