 Good day fellow investors. Now a few days ago I analyzed the situation in the nickel environment. We analyzed the supply growth, demand growth and we saw a very nice picture where the downside seemed limited due to nickel mining costs and the upside was very positive due to growing demand for steel especially from China and India and due to the potential growth in demand for the metal coming from electrical vehicle batteries. So a very positive situation for the metal while the price is still subdued due to high inventories in warehouses around the world because of past overproduction which is about to change as demand is expected to grow but supply is expected to stay stable. So we can expect higher nickel prices in the future. So when you see the potential for a metal to increase in price you want to be invested in miners because miners have fixed costs so every increase in that metals price is a pure profit for the miner. Therefore I went to look for the lowest cost nickel miner in the world because the lowest cost miner always gives you a margin of safety because whatever happens that miner will remain profitable and the lowest cost miner in the world is Norilsk Nickel it's a privately owned Russian company and it's a company as I researched it I must say I like it very much it has a very high dividend very low costs very high margins great ore body so production is expected to last for the next 50 plus years and there is huge potential not only coming from higher nickel prices but the miner also mines copper so there is huge potential coming from the fact that copper prices went up and this hasn't yet been recognized in nickel stock price so very interesting company and I'll now show you the research what I have done and my conclusions about the company I'm sure you'll find it interesting so Norilsk Nickel as I said Russian company which is the first Palladium miner in the world so I'll also analyze Palladium because it's interesting and how that affects the company second nickel miner in the world the first is Valle fourth platinum but that's a little bit less from revenue fifth cobalt everybody's crazy about cobalt and twelfth copper miner in the world so very diversified miner the mines are mostly in the polar division in the north of Russia with some activities in Finland and at that western part of Russia and there are some projects in the Cheetah region now what's very significant about the company is that it has the most valuable mining asset in base and precious metal industry if you compare the reserves and resources of Norilsk Nickel and its Talnak district it's bigger than the Escondida mine it is much bigger than three ports indonesian operation so there is a huge huge amount of value in Norilsk Nickel for generations to come additional value is created from the fact that the average ore grade for Norilsk is four to five percent for Nickel equivalent which makes Norilsk the lowest cost producer on the Nickel cost curve Norilsk costs of producing Nickel are negative thanks to the copper the cobalt the platinum the Palladium that it mines alongside Nickel and then the resources additional resources have the potential to be qualified as first and second quartile projects especially if Nickel prices increase copper prices increase as expected check my video on copper also then really the potential for Norilsk is huge the company is well set good operations and they expect stable mining for the next four three years and then slowly higher mining activity expansion of the concentrating capacity to a higher level which will lead to better metal recoveries and higher production so will not grow in volume in the next two three years but from then onwards you can even expect growth in volume especially at that point copper prices will probably be higher as they enter a supply gap so a very very favorable outlook for the company so we already mentioned the reserves and resources this is just the resources and you can see how the 82 percent of the resource base is high grade ore which means lower cost mining and we can see that high grade can be mined for the next 20 years so the company offers real stability on top of it just to mention the company is exploring additional potential findings and mining operations across the whole of Russia focusing on what's going on in the company here we have the Nickel production slightly growing copper production significantly growing and platinum palladium precious metals productions also growing a bit now if we look the revenue distribution nickel 2.6 billion copper 1.8 billion palladium 1.8 billion and platinum 654 million in 2060 okay so that's the distribution of revenue now let's look at what happened to the prices of each of those metals now what's happening in 2017 and we can estimate as the production in volume is expected to be flat with some growth in copper we can estimate this year's revenue for Noril's nickel so first nickel let's say prices went a bit higher now they are increasing but let's take that the prices in 2016 and 2017 are equal so equal revenue coming from nickel just an increase of three percent from higher production however copper prices are significantly higher so in 2017 copper prices are 20 percent higher norilsk expects 10 percent higher volume production of copper so we can add those improvements to copper's revenue for norilsk in 2017 palladium prices have increased 40 percent in 2017 so increase the palladium by 40 percent of revenue and platinum prices have remained equal so i will keep that equal my total estimation based on metal prices and norilsk guidance gives me total 2017 revenue growth of 20 percent which is very significant for such a big company and especially a company that pays huge dividends and has a huge gross margin you will see now here i as i said company has been profitable during the slumping commodities prices so constantly constantly profitable with high net profit margins high ebita margins and high gross profit margins so here i have 2016 revenue i have plotted the estimated increase in revenue alongside the other revenue that the company is getting and i come to almost 10 billion in revenue for 2017 take off the mining costs and i get to gross profit of five billion dollars which was 4.1 billion in 2016 so conservative at the expenses at the operating profit we have ebita growth of 27 percent profit before tax should be around four billion take off the finance costs of 453 million finance income of 140 million and i am at the profit before tax of 3.8 billion so that shows 17 growth in profit before tax net profit should be a little bit higher with the tax rate which is 23 percent for the last few years so 2.7 billion in comparison to 2.5 billion there is some forex profits included and forex profits can also be positive in 2017 but i didn't calculate them to be conservative now what's important we saw that ebita will probably grow 27 percent and no real in a positive environment has decided to pay 60 percent of ebita in dividends they can do it because they are the lowest cost pro producer and they simply are a cash machine the current dividend yield is 10 percent 27 percent increase in dividend if they manage to do it that's a dividend yield of 12.17 percent unlikely that it stays like that next year so very tempting investment of course norris has a minimum dividend payment of a billion dollars per year whatever happens but mostly that is higher shareholder structure owner ceo bladimir potatin russo has a big chunk then you have people like abrano which is at all a part so you're practically investing alongside the top russian oligarchs funny fact why i think the dividend will stay this is bladimir potatin's boat it costs 120 million so they need to pay out those dividends to pay for their lifestyle just to note he doesn't have only one boat he has four of them so the dividend will is there to stay especially with the low costs a look at the current valuation price earnings ratio is 15 dividend yield is 10 percent price to book ratio is very high but they pay out all their money in dividends they are extremely cash pro positive net debt to ebita is low because their margins are huge so they don't have to build protection in assets so what i like about norris it's metals privately owned sanctions whatever happens don't influence norris because you sell those metals at global prices and you can sell them to russia if you can sell them to the us and sanctions are so pumped up now but those are really limited in actual transactions so a very interesting company very high yield and the yield is expected to grow if you want to be exposed to the positive nickel trend positive copper trend and probably positive palladium trend which you have to subscribe in order to get the video in your feed with that i'll make soon then norris is really really an interesting company to look invest and enjoy the nice dividends and certainly a potential price appreciation because the dividend yield of 12.7 percent expected for 2017 is a bit too high to remain that high so price appreciation is expected just to show you the dividend history has been consistent over time the slumping commodity prices hasn't really affected it it is a little bit lower but as commodities pick up especially copper and nickel we can expect much higher dividends as for the stock price it was pretty stable while other miners went down norris price stayed stable it has picked up in the last year but still i found that under recognized by the market thanks to the copper in price increase and the palladium price increase the nickel price increase the potential will push this stock much much higher and when the higher dividend comes i also think the stock might go much much higher so to conclude i really find norris a huge value company high dividend and find that such a situation cannot stay for long the dividend will grow revenues will grow it's exposed to copper palladium nickel all metals that are in a very positive long-term trend so it is really really a gem and to buy it at the dividend yield of 10 percent is simply crazy the price might be low because it's russia because i don't know everybody's fear about investing with those oligarchs but if you don't feel that if you just like when your dividend comes on your banking account then norris is really a stock to think about especially because it has so much potential and so much positive trends that will push it much much higher as those metals increase in price i will still take a look at palladium to give you a whole picture about norris so make sure to subscribe to get the videos in your feed leave your comments below let me know what you think about norris gives you think about some risks something crazy that might happen notify us share your knowledge we are here to create a community of low risk high reward investors thank you for watching and i'll see you in the next video