Tuesday, August 30, 2011

Sky Network Television Ltd: Time for some Stripping!

After the latest Sky Network Television Ltd [SKT.NZX] profit result current shareholders are in for an early Christmas present in the form of a hefty and very attractive (like the completely in context photo to your left)dividend.

SKT have had a very good 12 months to June 30 2011 and on top of their 10.5c regular dividend they are paying a special dividend of 25c as a bonus. If you are eligible for the tax credits this is just under 50c per share or an approx 8% return on the current share price of $5.80.

What I am surprised about is that the share price has been stagnant since the announcement last Friday given the hefty return this would give the average investor and the fact that one would be stretching to get a third of this return if they left their green stuff in the bank.

The company is likely to have a another good year for full year 2012 with revenue gleaned from increased Rugby World Cup subscriptions so either I am missing something or potential investors are asleep at their computers.

If you look at the SKT share price (see 1 year chart below) it has been trading around its current level since May and is up about 15% since January so the stock price has mirrored an overall increase in stock prices for that period so you couldn't really say its share price has left the realities of its fiscal performance for the previous 12 months.

Investors have until 7 September to qualify for the payout and will get the green stuff in their banks just a week latter.

I good move for you dividend strippers out there.

Sky Network Television @ Share Investor

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c Share Investor 2011


  1. Darren,

    If Div stripping is the name of the game can I sell my SKT stocks on the actual registration date, i.e Sep 07th or must I wait until the next day.

  2. THAT is really good question and I am only 50/50 on whether you can do what you say you want to. I actually sold some shares a long time ago (pre internet)not knowing it was the registration day that I sold them on and got the dividend. I THINK I was lucky to qualify. Something tells me you have to actually hold them at the end of the business day on the qualifying day. Can someone else elucidate if I am barking up the wrong tree?

    1. Numerous times I have sold some shares on ex-dividend day, and I still got the dividend.
      I believe as long as you are holding the stock before the ex-dividend date, you will get the dividend.

  3. I just looked at the share price of SKT. It isn't moving up as one would expect with such a big dividend. Could be the only reason the share price has stayed around about level is the DIV. Watch for a big drop post Sept 7 maybe.

  4. Hmmm, interesting.
    I bought some shares once on the registration day and did not get the Dividend.Another company though.
    Well, we will what happens tommorrow morning.
    Thanks for your help on this

  5. Looks to be a good day to get it cheaper than yesterday, given the US indicies are well down. I hope you are going to buy a decent whack.

  6. Hi Darren,
    I have been considering buying a bit of SKT lately. The profits have looked stable the past few years, with a steady rise in dividends. Subscriber household penetration is around 49%, makes me wonder if they can go much higher, or stay around 50% for the years ahead.
    Share price has been floating around $5.05-5.15 for the past few months. Just when it looked like taking off to 5.35+, Todd communications sells their 11% holding to knock it back down to current levels of around $5.10.
    I was wondering if you had any new views on SKT? Could Todd selling out mean further decline in share price?

  7. Yeah, SKT is a good one especially at todays price in the low 5s. This company is winner based on growth to come, they expect further penetration, and further ways to extract moola from their customer. T hey have thus far been able to do both. Watch for surprised divs, Darren

  8. Thanks Darren,
    I just bought 600 SKT shares today.
    I see that Fisher Funds have been buying recently too, which made me a bit more confident.
    Looking forward to big dividends next year!

  9. No your doing the right thing...don't sell.


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