CEO thinks shareholders are missing the picture on Glencore’s strong cash flow. If you’re happy with investing in coal, he may have a point.
Higher U.S. bond yields have made the payouts offered by most stocks look pretty underwhelming lately. Not so Glencore Plc, whose implied yield is startlingly high even though it’s throwing off cash like it’s going out of fashion.
The miner-cum-trader thinks it can generate $7.5 billion of free cash flow next year at current commodity prices. Absent a downturn in the economy, it’s conceivable that the company will return all of that to shareholders via dividends and buybacks, it said on Monday. Here’s the relevant slide:
The market shrugged at its largess, even erasing some of the gains Glencore had enjoyed from the easing of U.S.-China trade tensions. The shares have dropped more than 21 per cent this year and trade on less than 8 times estimated earnings. Continue Reading →