Monday, February 19, 2007

SFK Pulp increases dividend:

SFK increased its monthly dividend to .05 from .03, based on "Good market conditions, the acquisition of the Fairmont and Menominee mills and the reduction of our level of indebtedness." Also, Canfor Pulp reported great earnings based off better pricing, although they warned that fibre costs were rising. This is an important aspect of the SFK investment that differentiates it from its western pulp mill competitors. Since SFK already pays $150 per tonne of woodchips compared to $60 in western Canada, the risk of increasing fibre costs for the company is minimal- in fact, an improvement is even likely. For great notes regarding the Canfor Conference call, please refer to :
Canfor Conference Notes on BHS forum

SFK's annual distribution is now at C$.60. But based on our analysis, the company will be generating far more cash than this, so look for further increases in the future. C$ 1.00 annual dividend seems very likely in the next 12 months.

Investment Analysis on SFK

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