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Q: Explain a stock's financial info found on Yahoo ( Answered 5 out of 5 stars,   0 Comments )
Subject: Explain a stock's financial info found on Yahoo
Category: Business and Money > Finance
Asked by: atr-ga
List Price: $5.00
Posted: 02 Sep 2005 05:51 PDT
Expires: 02 Oct 2005 05:51 PDT
Question ID: 563463
Please refer to the following page:

My question is basically "what am I missing?"
How can this company afford to pay a dividend
of 27.6% on a P/E of 8.74 (or 49% on 3.07, if
you look at the trailing rather than forward
numbers), and still have positive cashflow?
Subject: Re: Explain a stock's financial info found on Yahoo
Answered By: omnivorous-ga on 02 Sep 2005 08:55 PDT
Rated:5 out of 5 stars

A dividend of 27.6% would indeed catch my eye too.  Too bad that we
just missed the Sept. 1 ex-dividend date . . .

The problem here is that the Yahoo information appears to be
incorrect.  It shows a forward annual dividend of $12.90 and a
trailing dividend of $22.19.  But according to the Wall Street Journal
online (a subscription service), Frontline just announced a $2
dividend on its NYSE shares.  Paid quarterly, that would be $8 per
year ? still not a bad return on a $45 stock.

Let?s look at the dividend history from the investor relations pages
of the oil tanker company:
Frontline (FRO)
?Dividend Policy & History?

FY2005 (2 quarters): $5.10
FY2004: $12.90
FY2003: $8.90
FY2002: $0.20

Frontline is a tanker company, operating in spot markets where demand
for oil can push lease rates up for tankers and make them very
profitable.  That?s what has happened since 2002.  However, even then
the company?s cash flow has been negative, as its own pages indicate:

?5-year Highlights?

Revenues have tripled for the company since 2002, from $551.6 million
to $1.855.6 million and pushed the company from a loss to a net income
of $1,023.4 million or $13.79 per share.  Still, the company paid out
$1,040.1 million in dividends ? only slightly less than cash provided
by operations.

In fact, the cash flow statement shows that total cash flow for the
company last year was slightly negative, with cash used at $1,103
million ? so it DOESN?T have positive cash flow.  However, continued
strong rates for tankers clearly have investors believing dividends
should stay attractive.

There?s an excellent company analysis of market conditions, made to
analysts within the last 2 weeks here:

Frontline Ltd. 
?Interim Results for the Quarter ended June 30, 2005?

Best regards,


Clarification of Answer by omnivorous-ga on 02 Sep 2005 12:09 PDT
ATR --

Any secondary source is a possibility for errors, though Value Line or
Standard & Poor's do a lot of data checking.  I think that I'd
continue to use Yahoo and others, then check unusual information with
company research and the SEC Edgar pages.

Frontline is very interesting in that it's been so strongly effected
by spot-markets and has reflected it's earnings so quickly in the
dividend payouts.

Best regards,

atr-ga rated this answer:5 out of 5 stars
I think the most important thing I just learned from your
response is that the Yahoo data is not reliable. Are there
any other data services you recommend?

There are no comments at this time.

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