One of Metcash Limited's (ASX: MTS) greatest features has just been scrapped, and investors are not happy.
Conditions have turned even gloomier for the grocery and auto parts distributor today after it said it had booked a $640 million write-down to goodwill and other assets which it blamed on "an increasingly competitive trading environment". Shareholders can thank Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) for that bad news.
Investors who piled into the stock for its generous 13% fully franked dividend have even more reason to be disappointed. The company said that it will not be paying a final dividend this year and intends to suspend dividend payments for the 2016 financial year as well.
The market's response was exactly how you would expect it to have been. The stock plunged by as much as 19% to a near 14-year low of $1.12, before rebounding marginally to trade at $1.15.
Source: Yahoo! Finance
Long-term 'Foolish' investors would be wise to give Metcash a miss and focus on some of the market's more appealing dividend payers.