Fraport the perhaps underestimated dividend story

Fraport - the perhaps underestimated dividend story?

$FRA (+1.01%) is paying a dividend of € 1.00 per share for the first time since the pandemic. However, I find the new dividend policy even more exciting: as soon as net debt/EBITDA falls below 5.0x, 60-80% of profits will be distributed in future.

Following the completion of the major investment projects in Frankfurt and Lima, the free cash flow is already positive again and the focus is now clearly on reducing debt. If this path proves successful, this could $FRA (+1.01%) develop into a much more attractive dividend stock in the long term. Of course, the high level of debt remains a risk and the aviation industry is highly cyclical. Nevertheless, I find the combination of growing passenger volumes, falling investment requirements and a much more shareholder-friendly dividend policy very exciting.

Here is my question to the community: Am I missing something here or have we possibly $FRA (+1.01%) possibly a dividend story that has not yet been fully priced in?

https://www.finanzwire.com/article/fraport-ag-frankfurt-airport-services-worldwide-etr-de000577-fraport-ag-adjusts-dividend-policy-for-future-flexibility-5LxbYU2NG0L

https://goldesel.de/aktien/news/fraport-andert-dividendenpolitik-1-eur-bis-5x-net-debtebitda-danach-6080

~ No investment advice ~

SathosiRuffy@SathosiRuffy

1Wk

Has made a decent recovery. I picked it up at around €35-40 during Corona and sold it too early at around €50.
The exciting question remains, will Fraport beat the market? I don't think so in the long term, it remains a great but cyclical company.

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DividendenPapa@DividendenPapa

@SathosiRuffy Most of us are probably familiar with selling too early. 😄

I'm actually with you on the subject of outperformance. I don't necessarily see $FRA as a share that will significantly outperform the market in the long term. For me, the exciting question is rather whether an attractive dividend stock can develop as a result of the falling debt and the new dividend policy. Cyclicality remains an issue, of course.

CaYaRo@CaYaRo

The resumption of the dividend is extremely positive.
However, I consider the declining investment requirement to be a fairy tale, as this only applies in the short term for a capital-intensive infrastructure stock such as $FRA and is therefore reflected in the share price.