The business model is supportive of paying out more than 50%.
I believe they last paid out 62.5%, a 10 cent dividend on 16 cents in earnings.
On a ten million dollar revenue model, whenever that is, or was, or will be, and at a 36% operating margin which is just a guide and not an estimate (zoom is cheaper to communicate with clients than the vroooom method), I think they can make 40 cents in earnings and pay out 25 cents in dividends. That's a 62.5% payout ratio.
It is also possible that their bank account has all our names on it. When and how often that is addressed will be interesting.
Their one time special dividend of four cents from an AMT refund and in house cost savings was quite unique. Just as telling was not paying out a special dividend last year for reasons they cited in the letter.
Putting those two together tells me just how responsive they are as stewards of capital by micromanaging special dividends.
In talking to slimpickens, he feels that the social distancing benefits provided by the patch over urine analysis does not change overnight because of a vaccine. With that thought, we could be looking at an upside surprise in revenues.
The nice thing about upside surprises is that they biggest bulls are saying only 8,9,10 million dollars in revenues.
We learned of one large county order (5% of revenues), market share gains in a small program (from 22% to 37%), read about first half screens and product sales surge late in the period so something very special is happening.
I'm happy to be preaching to the choir, because I never feel comfortable putting out numbers.
