Jock Ellis Cumming, GA US of A Georgia Association of Railroad Passengers
QUOTE: Originally posted by TerminalTower You are a board member of a Class One Railroad,,,You show a good profit this year and you showed a good profit last year which is no easy task... Do You,, reinvest the profits in buying new locomotives and track upgrades and hope that will result in increased book value of the stock as the railroads infrastructure and Rolling stock is increased in value,,, Or Do you declair a Dividend in the hopes that the Shareholders will reinvest there dividends in buying more stock and increasing the value of the company that way? Also remember that the Employees Pension Fund owns a huge chunk of stock in your railroad[:)]
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QUOTE: Originally posted by ajmiller The first thing you do is go back to high school, work on your spelling and vocabulary, and maybe get your diploma.
QUOTE: Originally posted by eolafan.... one must always generate more business at a greater profit level in order to pay more and bigger dividends
QUOTE: Originally posted by Limitedclear Assuming I had an excess of cash, I would first increase loss reserves, then review company plans for capital expenditures. If feasible I would propose advancing planned projects or, if none plan and invest in perceived weak areas by adding capacity (a new siding or interlocking for example). In the event that was not necessary I would propose a stock buyback as set forth above by others (and is actually happening with several of the Class 1s right now) LC
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QUOTE: Originally posted by kenneo As Mac stated above, this process can cause bankruptcy, and in fact, one famous case resulted when the MILW kept paying out high dividends to keep up its share price in relationship to the CNW when it was attempting to merge with the CNW. The MILW stockholders loved it, but the money came from funds to pay the bills, buy equipment and maintain the RR. Finally, the money was no more.
QUOTE: Originally posted by TerminalTower Well I could pass on the profits to my customers in reduced freight rates on certain lanes in the hopes that will atract more buisness.
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QUOTE: Originally posted by Murphy Siding QUOTE: Originally posted by TerminalTower Well I could pass on the profits to my customers in reduced freight rates on certain lanes in the hopes that will atract more buisness. That's a little too simplistic to actually work. You'd be much better off trying to bring new business, to add volume(and hopefully lower your costs to do business) or improve your service to existing customers, so you can charge them more for your service.
QUOTE: Originally posted by AMTK200 Personally I would reinvest it in the Infrastucture myelf.
QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by Murphy Siding QUOTE: Originally posted by TerminalTower Well I could pass on the profits to my customers in reduced freight rates on certain lanes in the hopes that will atract more buisness. That's a little too simplistic to actually work. You'd be much better off trying to bring new business, to add volume(and hopefully lower your costs to do business) or improve your service to existing customers, so you can charge them more for your service. Actually, that's whats been happening since the Staggers Act, although it was surely no manifestation of altruism on the part of the railroads, but rather part of the Staggers Act they hadn't anticipated. The shippers got far lower rates, the railroads got huge amounts of low margin and no margin business, had to rebuild the very capacity they had earlier claimed they didn't need, and they still couldn't earn their cost of capital. The interesting thing about evaluating the Staggers Act is that if regulated rates had continued in effect, and the railroads had been able to actually benefit from the crew law changes, they would have been highly profitable businesses. Deregulation permitted/required them to hand their profits back to the shippers, even as they were able to cut costs dramatically. Nearly every nickel in savings/profits went to the shippers. Best regards, Michael Sol
QUOTE: Originally posted by CSSHEGEWISCH The whole issue of retained earnings vs. dividend payments is cropping up in a lot of other sectors as well. Since stock appreciation has tapered off since the tech bubble burst and the tax laws have changed, dividends have become more important to investors. While some earnings should be re-invested in the business, sitting on a large pile of cash is a red flag to takeover artists and other such miscreants.
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