13.6% dividend increase from Moury Construct

Belgian construction firm Moury Construct just published its 2015 financial results and rewarded shareholders with a 13.6 percent dividend increase. In June, the company will be paying a dividend of 5.0EUR per share, up from 4.40EUR per share. The company earned 9.9EUR per share for 2015 so this corresponds to a payout ratio of 50.5 percent.

This is one of the value hunting stocks in my dividend growth portfolio, it’s a small cap with illiquid trading but it has some very interesting characteristics. I first wrote about this company in September 2015 and since that date little has changed in terms of the massive undervaluation.

The stock is currently trading at 134.45EUR per share which means it has a P/E of just 13.58. But the real kicker is this company is sitting on cash reserves of 91.58EUR per share. Moury Construct has no financial debt so if we subtract the cash from the share price the P/E is just 4.33!

Revenue for 2015 was down 7.0 percent but operating profit increased 9.9 percent and earnings per share soared 67.4 percent.The company is sparse in its communication with shareholders but said it has an order book of 110.5 million EUR, largely in-line with last year.

It is one of the cheapest stocks on the Brussels exchange and this undervaluation has been going on for years as shareholders are waiting patiently for management to unlock the true value of this company. Hopefully, the company will return excess cash to the shareholder but a delisting is also a possibility as over 60 percent of the firm’s shares are controlled by the Moury family. In the meantime, shareholders get an attractive dividend yield of 3.72 percent.

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