Well, where we do agree is that I'd have preferred a larger target for an all cash dividend too.
Question is whether 6% of income in cash PLUS 6% of income in a note paying 8% in 30 months is better than 8% of income cash only.
Suppose it's debatable, but let's just compare the two.
For simplicity's sake, let's assume $1.00 income in 2011, 2012, and 2013, and 100,000 shares owned.
8% cash gets you $8,000 yearly for a total of $24,000.
The hybrid plan gets you $6,000 yearly, PLUS a $6,000 note yearly paying 8%, so the total will be $36,000 + $8,640 interest, so $44,640.
Shareholders are sacrificing receiving $2,000 for each of three years in order to receive $20,640 more.
Better, right?
It is perhaps unnecessarily complicate, and might be interpreted poorly in this skeptical environment, but it was really a clever way for the company to further incent shareholders to capitalize on the company's future, while retaining full capital development flexibility now.
But either way, any dividend is a shareholder friendly move, and very unusual for small, high growth companies, especially in this space.
