Garmin Ltd (NASDAQ: GRMN)

[phandal]

What do you guys think of this stock? I am thinking of taking a long position for the medium term, like to hear your thoughts. I am especially interested in their avionics business, particularly their avionics packages for small business jets. They haven't been doing too badly, and P/E is decent.

What's your opinion?

[Clement]

What do you guys think of this stock? I am thinking of taking a long position for the medium term, like to hear your thoughts. I am especially interested in their avionics business, particularly their avionics packages for small business jets. They haven't been doing too badly, and P/E is decent.

What's your opinion?

I have looked into the company a little while back mainly focusing on the fitness and outdoors segment. I am not too familiar with the avionics market and cannot really give much insight into the relative advantages Garmin possesses.

However, are the dividends subject to Swiss withholding taxes?

[phandal]

Yes that's one of the concerns I have about it, if it's dutiable in both country of domicile and listing, then we only stand to receive 45.5% after withholding taxes. Asked my broker about it and he says he'll check with their US custodian on Monday.

[Clement]

Yes that's one of the concerns I have about it, if it's dutiable in both country of domicile and listing, then we only stand to receive 45.5% after withholding taxes. Asked my broker about it and he says he'll check with their US custodian on Monday.

From what I understand, Singapore and Switzeland have a double taxation treaty which limits withholding taxes on dividends taxed at source to 15%. One of the factors that attracted me was the decent yield. At current prices, I think I will pass partially due to the withholding taxes.

[phandal]

My broker's US custodian says that the jurisdiction with the higher withholding tax (in this case Switzerland's 35%) will be levied, so no double taxation.

[Clement]

My broker's US custodian says that the jurisdiction with the higher withholding tax (in this case Switzerland's 35%) will be levied, so no double taxation.

I was referring to the Singapore - Switzeland double taxation treaty. 

https://www.iras.gov.sg/irashome/uploade...02012).pdf

Investments in Swiss companies by Singapore tax residents are granted a lower withholding tax rate on dividends of 15%. However, the full withholding tax of 35% will be withheld at source and it is up to the investor to request a refund of 20% from the Swiss tax authorities. The process to recover the excess tax withheld can be quite inconvenient.

[phandal]

I can imagine, and probably not worth the effort if our holdings don't add up to much.

[phandal]

Article comparing GoPro & Garmin.

What the author didn't factor in, however is that Garmin already has some assured growth, especially in the aviation services, being the default avionics suite of 2 new Very Light Jets with backorders -- the Cirrus SF50 and the Hondajet.

http://www.fool.com/investing/2016/09/20...yptr=yahoo