EGL.UN.TO - Eagle Energy Trust - Page 2
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Thread: EGL.UN.TO - Eagle Energy Trust

  1. #11
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    gibor, it's a big sale, but it's also nearly 70% of their actual production! I'd rather invest in a company that doesn't have to grow to support a dividend. Who knows what they're going to do or buy with the $140M. They are paying $35M+ a year in dividends. That is going to be a tough challenge with only 30% of their production left and just $140M in cash. Most companies with twice that capital would have trouble supporting that dividend.

    I just don't see how it is possible. Compare with this: LRE.TO has more than 10 times the pre-sale production of EGL.UN (and as much as 14 times by next year), but only has to pay out 2.3 times as much in dividends. Which is more sustainable?


  2. #12
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    This is probably why EGL.UN already announced dividends for next 3 months... after this sale they have book value close to $9 ... also EGL has Total Debt/Equity 0.36 and LRE 0.76
    May EGL.UN be takeover target?

  3. #13
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    I doubt it - they're not the only oil and gas company trading at a discount to book, but what I do know is that dividend will eventually disappear.

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  5. #14
    Senior Member HaroldCrump's Avatar
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    I don't know this specific company, but in general when companies do large asset sales like this, the proceeds are often used to buyback shares, which reduce future dividend liability.
    Or, they do it under pressure from activist investors.

  6. #15
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    Gibor or any investor, are you guys still holding this?

  7. #16
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    Still holding. Still under water. Including the 11% drop today.
    Last edited by londoncalling; 2014-11-04 at 10:49 PM.

  8. #17
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    Quote Originally Posted by londoncalling View Post
    Still holding. Still under water. Including the 11% drop today.
    Yeap.... me 2 however i have very small position (as for majority of small caps I hold) and good thing that I never averaged down....

  9. #18
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    Quote Originally Posted by Eclectic12 View Post
    Point of clarification ... the TFSA is Canadian tax free ... which for a Canadian stock/trust, means tax free.

    A US dividend paying stock on the other hand, is Canadian tax free but the last I read, it still subject to the US gov't/IRS 15% withholding tax on dividends.

    There's been some rumours the Canada/US tax treaty would be updated to add the exemption the RRSP enjoys in this respect, but so far, I haven't seen anything saying this has happened.

    Cheers
    Interesting. So just to clarify, are you saying if you hold a canadian dividend paying company in your TFSA you do not pay taxes on the dividends, but if you hold a US dividend paying company within your TFSA the US gov't/IRS will charge me a 15% withholding tax on those US based dividends?

    If this is the case, I'm getting screwed... I keep my Canadian Dividend paying stocks outside my TFSA because I only pay 10% income tax on the dividends anyway. I keep the US companies inside my TFSA and RRSP.

  10. #19
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    Quote Originally Posted by Addy View Post
    If this is the case, I'm getting screwed... .
    Yes, you are

  11. #20
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    Quote Originally Posted by gibor View Post
    Yeap.... me 2 however i have very small position (as for majority of small caps I hold) and good thing that I never averaged down....
    my oil and gas allocation is currently 5% of portfolio much less than most Canadian index funds. Have some wiggle room here to get more shares of some quality energy stocks. EGL was very speculative for me at the time. down on a lot on share price. down some with divvies. expecting to be under water for a long time. Div is unsustainable. They will have to liquidate assets ad cut the divvy. Whole sector is down as we all know. Waiting for a bottom before I make any more energy plays


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