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Thomas Wellner, president and CEO of CML Healthcare, on June 8, 2012.
Thomas Wellner, president and CEO of CML Healthcare, on June 8, 2012.
(Peter Power/The Globe and Mail)

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CML stock sinks as dividend cut looms

The dividend at CML Healthcare has long looked dangerous to some investors, and now the company is signalling that the payout that has supported the stock may be cut.

As Streetwise pointed out in a column in August, CML’s payout ratio was dangerously close to 100 per cent, meaning every penny the company brought in would be going out the door again to investors. That would leave no room for debt reduction or other ways of solidifying the balance sheet, and no cushion if business started to falter, making a dividend cut a likely outcome.