When EnergySolutions, a nuclear waste management company in Salt Lake City, went public in November 2007, it did something not that many newly listed companies do: It announced plans to issue a dividend.
"We knew we had a pretty stable business with stable cash flow," says CFO Philip Strawbridge. "With two-thirds of our income coming from life-of-plan arrangements with utilities that operate nuclear plants, and most of our other contracts being with the U.S. and U.K. governments, we felt we had the predictability to pay out $10 million a year in dividends and still leave us with $60 million of true free cash for investment."
Meanwhile, there was the advantage that, at a time when the IPO market was starting to close down, "we could open ourselves to funds that require that their investments pay dividends–such as teachers union pension funds and the like–investors that have the advantage of being more stable and long-term."
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.