Friday, September 2, 2016

Norbord and dividend

I've been holding Norbord (OSB) off and on for more than a year. I've done nicely with the stock and I'm still quite enamored with it. Many analysts are predicting a target value far higher than today's share price. I'm not sure I see OSB hitting the highs some analysts are forecasting ($37 and $38) but I am confident that it will climb from today position with any luck at all.

What intrigues me about Norbord is its dividend potential. For many years it paid a very handsome dividend and then it began to decline. When Norbord merged its operation with Ainsworth, the dividend was cut to 40-cents a year. Well profits are now up and the synergies Norbord envisioned are all gelling. The bottom line for Norbord is solidly in the black, or so I believe.

My question today is: "How long until Norbord bumps up its dividend?" I'm beginning to see myself buying and selling Norbord for a little trading profit and then holding it for the dividend in the future. The profits made during this trading period will soften the losses, and help me ride out the lows, that will inevitably happen.

The market never climbs forever. Corrections are always lurking just around the corner.

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