That bottom-up simulation is one option, and you’ve arrived at the same EPS of 0.2 as in OP’s analysis. OP, however, has assumed an improvement in operating profit to a level of 40m, and taxes are rising to 5m (was 4m), so if there were an additional tax benefit of 2-3m on top of the increase in operating profit, the EPS would rise even more. The biggest question mark is the development of margin levels—is there still a chance to improve, and what levels can the company defend in the future now that the major turnaround has been completed?
Monitoring the cash position is a good point; I personally believe the company will pay off the 90m bond this year with some combination of a new bond/bank loan and possibly use cash to reduce the debt. Debt amount maybe -15m on an annual basis? And the next cash accumulation for the redemption of the hybrid loan. The dividend and potential extra dividend are approx. 13.5m – whether that is too much relative to cash and debt, each investor should decide for themselves.
And regarding the valuation of such a low-growth defensive company. P/E or EV/EBIT are decent metrics for what the company’s maximum value can be at any given time. You can crunch numbers endlessly, but the current share price of 1.82 and this year’s EPS of 0.2 do not include any growth assumption (PVGO); it is even negative. A DCF model can easily be made to show a value of 3 EUR if you assume that margin levels hold. The DCF currently results in a value of 2 EUR only if you dial down the residual margin level significantly. Not very useful to run those numbers for a company like this.
In my opinion, the dividend yield % represents a floor for the company’s valuation if the market believes that the dividend level is permanent and perhaps slowly but surely growing. Thus, the floor could be 5% in a “normal situation”, 6% if uncertainty increases, and 4% or below if performance is good for several years in a row and confidence is thus high.