North American Palladium (TSX:PDL) – Solid Q2; Special Dividend Signals Confidence, More Expected

Impact: Positive

North American Palladium released solid Q2/19 results and announced a special dividend of C$0.35/sh. We think the special dividend is an important signal of confidence to the market. We believe that improved operating performance QoQ, the underground expansion being on-track and continued strength in the palladium price, could result in a special dividend becoming a regular occurrence. We are maintaining our C$25/sh fair value estimate and believe the company’s ability to generate FCF and thus, return capital to shareholders, should drive the stock higher.