# Dividend/distribution cuts 2015



## londoncalling (Sep 17, 2011)

Please post news and links relating to dividend cuts on this thread. I expect the majority of the posts to be O&G related if oil price continues to slide or stay low longer term. 

Hopefully this thread sees little action.

Cheers


----------



## Canuck (Mar 13, 2012)

Surge Energy 50% cut!


----------



## londoncalling (Sep 17, 2011)

Canuck said:


> Surge Energy 50% cut!


First one and I own it :frown:

Here is the link 

http://web.tmxmoney.com/article.php?newsid=72667706&qm_symbol=SGY:TSX


----------



## Canuck (Mar 13, 2012)

Temple Hotels from .54 to .30


----------



## 0xCC (Jan 5, 2012)

Canuck said:


> Temple Hotels from .54 to .30


Wow, is this the first ripple of the oil price drop outside of the energy sector? Even though it can be argued that Temple isn't really that far outside the energy sector: " As of December 31, 2010, the real estate portfolio of the Company consisted of 10 hotel properties, comprising 1,241 rooms, including six hotel properties located in Fort McMurray, Alberta."


----------



## humble_pie (Jun 7, 2009)

0xCC said:


> ... As of December 31, 2010, the real estate portfolio of the Company consisted of 10 hotel properties, comprising 1,241 rooms, including six hotel properties located in Fort McMurray, Alberta."



above 2010 info is too dated to consider. Company now owns 32 hotels with 8 situated in Alberta. Hotels are spread across canada with 7 in ontario, 3 in nova scotia, although the geographical diversification was recently acquired & is not yet accretive to earnings.

dividend cut leaves a dividend that is still generous. No one was expecting TPH to uphold a payout yielding 15%. I for one would have rather seen a steeper dividend haircut.

low CAD & low gas prices could be expected to boost tourism in canada while a broad north american recession could destroy it.


----------



## Canuck (Mar 13, 2012)

Freehold Royalty cut from .14 to .09 

Well this year sucks so far, 3 dividend cuts and 1 raised


----------



## yyz (Aug 11, 2013)

Pengrowth Energy PGF.TO cuts dividend 50% to $0.02/month effective March payment


----------



## My Own Advisor (Sep 24, 2012)

Twin Butte (TBE)
http://web.tmxmoney.com/article.php?newsid=72376711&qm_symbol=TBE

"Older news" but didn't see it posted here.

"The Company's Board of Directors has approved a $40 million (22%) reduction in the 2015 capital budget and a 37.5% reduction to the monthly dividend. Beginning with the January 2015 dividend payable in February 2015, the modified dividend will be $0.01 per share ($0.12 per share annualized). Twin Butte will also be suspending both the DRIP and SDP plans at the same time. These changes will reduce the Company's annual cash outlay by $58.7 million while also reducing the issuance of approximately $6.8 million worth of equity from the suspension of the DRIP and SDP plans."


----------



## 1980z28 (Mar 4, 2010)

https://www.google.ca/url?sa=t&rct=...XIgpAK&usg=AFQjCNFIujKzut14GMceyR4M55y5z5hVvA

Looks like another cut


----------



## londoncalling (Sep 17, 2011)

Wajax major cut. 

http://www.theglobeandmail.com/globe-investor/news-sources/?date=+20150303&archive=cnw&slug=C9821


----------



## 0xCC (Jan 5, 2012)

I think this thread should probably be given a bump. I have a feeling we are going to see some more activity in the coming weeks and months in the oil patch.

Today's news is Penn West. Eliminates dividend, cuts capex and reduces workforce by 35%:
http://pennwest.mediaroom.com/index.php?s=27585&item=135255

Before that was Baytex I think... Yep, here it is:
http://www.baytexenergy.com/files/pdf/news-releases/2015/2015-08-20 Budget Update_FINAL.pdf

Eliminates dividend and cuts capex.

I won't be surprised to see a few more energy companies eliminating their dividend by the end of the year (or even this month). I'm looking at you COS...


----------



## londoncalling (Sep 17, 2011)

http://www.theglobeandmail.com/repo...onse-to-low-commodity-prices/article26173257/

While we're at.


----------



## gibor365 (Apr 1, 2011)

KMI cut dividends by 75% . Hold small position...not sure if I need to sell.....


----------



## londoncalling (Sep 17, 2011)

Here's the link for KMI

http://seekingalpha.com/news/2972776-kinder-morgan-whacks-dividend-by-75-percent


----------



## My Own Advisor (Sep 24, 2012)

This is a responsible management move.


----------



## james4beach (Nov 15, 2012)

Earlier in the year, but noteworthy: Bombardier BBD.B also eliminated their dividend



> On February 11, 2015, the Board of Directors of the Corporation decided that, based on the financial results for fiscal year 2014 and until further notice, there would be no dividend payment on the Class A Shares (multiple voting) and the Class B Shares (subordinate voting)


----------



## londoncalling (Sep 17, 2011)

The eagle has (crash) landed.

http://www.equities.com/news/eagle-...ance-and-a-reduction-in-monthly-distributions

50% cut. shouldn't come as a surprise to anyone.


----------



## My Own Advisor (Sep 24, 2012)

Encana (ECA) chop-chop:
http://www.cbc.ca/news/canada/calgary/encana-capital-budgets-cuts-dividends-1.3363820

"The announcement by one of Canada's largest oil and gas producers came as crude futures traded below US$35 a barrel, a level not seen since early 2009 during the deep global recession."


----------



## pwm (Jan 19, 2012)

I just got my Enerplus dividend. It dropped from $.05 to $.03 per share.


----------



## james4beach (Nov 15, 2012)

What I posted in this other thread about a tightening corp bond market is going to also affect dividends. In addition to worse profits, financing problems are going to be another reason that dividends (and share buybacks) are cut going forward.

Companies with better cashflows (especially those who don't rely on debt to keep the cash flowing) are better poised to maintain their dividends. This is an example of how the dividend can indeed be a test for a company, like a liquidity test or resilience test.


----------



## My Own Advisor (Sep 24, 2012)

pwm said:


> I just got my Enerplus dividend. It dropped from $.05 to $.03 per share.


Time to load up! 

PWM, you're largely living off dividends...are you going to buy some O&G stocks in the new year?


----------



## pwm (Jan 19, 2012)

I'm not interested in having any more O&G stocks. I'm actually looking at increasing my REIT holdings. If XRE gets to $14.00 it would be compelling.


----------



## My Own Advisor (Sep 24, 2012)

Gotcha. I'm still looking at SU, CNQ, and POT for the New Year as long term investments. 

I'm liking the prices of most REITs now, I've decided to debundle my REIT ETF and own REITs directly.


----------



## CPA Candidate (Dec 15, 2013)

pwm said:


> I'm not interested in having any more O&G stocks.


Good call. All one needs to do is go back a year on this forum and read about how it was such a great time to buy; that didn't work out for anybody.


----------



## OurBigFatWallet (Jan 20, 2014)

Journey Energy (JOY) dividend has been suspended. http://boereport.com/2015/12/14/jou...or-2016-and-suspension-of-quarterly-dividend/


----------



## AltaRed (Jun 8, 2009)

More dividend cuts to come in the O&G industry if the Saudis don't blink soon. 2015 hedges are rolling off and many companies could become cash flow negative. What with reserve write downs as well, 4Q results will be terrible.


----------



## My Own Advisor (Sep 24, 2012)

TBE (Twin Butte) is up for sale.
http://www.theglobeandmail.com/repo...y-may-put-itself-up-for-sale/article27686935/

We need a Canadian O&G Board/Thread.


----------



## gibor365 (Apr 1, 2011)

> if the Saudis don't blink soon


 official Saudia wants to destroy West economically 
also looks like that our petro-dollar going down to 50's area .... wanted to buy US MM several months ago, too bad didn't 

just checked S&P/TSX Venture Composite Index .... extremely "nice" returns , almost 80% in 5 years! much more in neutral currency....
more than 30% down comparing to lowest price during last big recession!

Can Venture by itself go bankrupt?!

Ohhhhh Canada :biggrin:


----------



## AltaRed (Jun 8, 2009)

Saudi knows it cannot do real economic damage to OECD countries (except maybe Canada). But it is killing petro-companies in developing nations. Latest on Petrobras http://www.reuters.com/article/petrobras-sale-idUSL8N13X2IU20151209 Can you imagine $130 Billion in debt? PDVSA is toast in Venezuela. Can hardly imagine how Nigeria is doing. On and on it goes.


----------



## gibor365 (Apr 1, 2011)

> (except maybe Canada)


 Maybe Norway too


----------



## sags (May 15, 2010)

Assuming the Saudis restrict output and prices rise again, what is there to stop them from repeating the same process again in the future.

All they would have to do is threaten to do it, and oil prices would tank.

A sword of Damocles will hang over the oil industry for a long time, and lenders would be very wary of debt driven exploration companies.


----------



## HaroldCrump (Jun 10, 2009)

AltaRed said:


> if the Saudis don't blink soon


Nigerian Oil minister & current OPEC chief has said that if price does not recover within the next two months, there will be unscheduled, mid-term OPEC meeting in February.
Some market participants believe that if price is still in the low $30s at that point, there could be some production cuts in OPEC.

The Saudis never intended for oil prices to go this low.
Their comfort range was around $50 - $60 for Brent crude.
They planned to price their oil about $2 below Brent and gain market share that way.

However, Brent is now below $40 and the Saudi discount is $3 on most days.

So the market has over-shot significantly from their calculations.

Why?
Because they made two massive miscalculations - the resiliency of the US shale producers (funded by the junk bond industry), and Russia's resiliency.
Continued ZIRP in the US, NIRP in the EuroZone, and rate cuts everywhere else (Canada, Australia, New Zealand), China slowdown etc. has driven yield chasing cash into the US junk bond sector, which is overwhelmingly shale O&G producers.
They are pumping more and more just to keep paying the interest payments on their debt.

As for Russia, they have handled this remarkably well.
In spite of crippling sanctions, massive currency devaluation, punitive high interest rates (17% as of earlier this year), they have continued producing O&G at competitive rates, made some great long term deals, and held on to their market share.

So essentially, the Saudi strategy has failed spectacularly in all its objectives.


----------



## OnlyMyOpinion (Sep 1, 2013)

^ Drifting badly....


----------



## gardner (Feb 13, 2014)

HaroldCrump said:


> So essentially, the Saudi strategy has failed spectacularly in all its objectives.


It would only have "failed" if they change their strategy without achieving their goal. If they have a target range and they have to adjust output to get to that range, it doesn't mean that keeping oil in that range is a failed strategy.

In terms of their stated policy, I don't see that Saudi is changing their tune. There is no reason to believe the Saudis can't keep up $50 or lower oil in perpetuity. US shale producers will eventually go bust when they run out of money and can't borrow more. I don't think anyone expected that to happen in 1 year, but in 5 it's a pretty sure bet.


----------



## HaroldCrump (Jun 10, 2009)

You are right, gardner that it is perhaps too early to say the policy has failed.
However, I do say that they miscalculated the resiliency of the shale producers and Russia.

Saudi is hurting, they really are.
Their budget deficits are higher than they expected, some social programs have been scaled back, they have had to sell some forex reserves, and they are on a credit watch by the major ratings agencies.
When they started out, they were over-confident in their war chest of about $750B of forex reserves.
They thought that the highest cost shale and oilsands producers will start to drop off within 6 months and by 18 months or so, most of the excess capacity will be gone.
Hasn't happened yet.

The other thing they did not anticipate are the technological innovations that are allowing more O&G extraction from the same wells via re-fracking.
This is the reason why US output is not falling in same proportion as rig count.
Using new technologies that have been emerging in last couple of years, the highest cost producers have been able to reduce their marginal cost per bbl of production - not by too much, but just enough to stay in business and keep pumping.

Marin Katusa did a post about some of those technologies on his blog...I can try and find the link later, or you can Google for it.

If there is indeed a February meeting, and they cap production, it will be interesting.
Also, the dynamics between the main OPEC players - Saudi and Iran is getting interesting as well.


----------



## gibor365 (Apr 1, 2011)

Some OPEC countries are not happy with so low oil prices, I'm curious if OPEC can break apart....


----------



## HaroldCrump (Jun 10, 2009)

Some have suggested that OPEC's influence over the oil market is long over....and it is not only because of US oil boom, but also because of Russia, renewable energy, and many other factors.
If so, breakup is only a matter of time.

Yesterday the US Congress lifted the ban on energy exports from the US...that will further reduce OPEC's influence on the global markets.
It seems to me that this is OPEC's (and Saudi's) last gasp at controlling the global oil market.
If this ends in failure i.e. Saudis are not able to regain their previous market share _and _the price of oil stays lows, the days of OPEC will be over.


----------



## AltaRed (Jun 8, 2009)

Not quite yet. From the WSJ


> The measure allowing oil exports is at the center of a deal congressional leaders announced early Wednesday on spending and tax legislation. Both the House and Senate still must pass it and President Barack Obama must sign it into law.


----------



## HaroldCrump (Jun 10, 2009)

Oh right...I forgot about the rubber stamping.
If he does veto, we only have to wait for 1 more year and then it'll be a done deal under a Republican President and/or President Trump :biggrin:


----------



## londoncalling (Sep 17, 2011)

My dividend portfolio took another hit to the Temple as Reit suspends dividend

http://www.newswire.ca/news-release...uspension-of-dividend-for-2016-567026471.html

Not surprised at the suspension but didn't expect the Share price to tumble with it. Dead money for me now and a huge lesson learned. "Don't believe the hype!" "Don't search for reasons to buy or confirm your idea they should be obvious" Temple closed today @ 82 cents. Innvest which was giving me 0 gain but steady div when I changed holdings closed @ 5.37. Live and learn crash and burn


----------



## james4beach (Nov 15, 2012)

londoncalling said:


> Not surprised at the suspension but didn't expect the Share price to tumble with it.


One of the big reasons people hold stocks with high dividends (REITs, utilities, banks, energy companies) is because of the dividend, and the misguided idea that high income can be produced from these stocks in perpetuity. Therefore, once the dividend is cut, people lose that reason to hold the stock.

I strongly recommend just holding the benchmark index ETF. It can produce all the income you want and need -- just sell shares on a regular basis to raise cash. Doing this does not hurt your capital appreciation any more than a dividend does. Read this great article on dividend myths.

What everyone (young or retired) fundamentally need are the best total returns. And the best way to get the best total return is to just buy the TSX using XIU, XIC or ZCN. Boring, but it works, and dividends are a non-issue.


----------



## londoncalling (Sep 17, 2011)

I will agree in principal. TPH and my REITs in general have been a mistake made by lack of experience/knowledge. With REITs one should want to buy the popular and loved as opposed to being a contrarian. I didn't understand this when I started investing. If I could do it over I would likely take the 3 biggest holdings of a REIT ETF as opposed to holding the niche REITs or paying an MER for something I could easily replicate. Same reason I don't own a financial ETF. Can replicate the same results with 3-8 4.95 commissions as opposed to an MER each year from now until retirement.

Cheers


----------



## gibor365 (Apr 1, 2011)

COP cut dividends by 67% .... earlier POT cut by 33%


----------



## james4beach (Nov 15, 2012)

I made the same yield chasing mistakes myself. In past years I owned ZUT and ZDV purely for the dividends.

Mind you, ZUT may not be bad for the utilities exposure itself - since you don't get very much of that otherwise.


----------



## Moneytoo (Mar 26, 2014)

gibor said:


> COP cut dividends by 67% .... earlier POT cut by 33%


Who's COP?  You didn't mean Coro Mining Corp, did you? I'm sure there're a few users here whose net worth is larger than their 3.19M market cap lol

Upd. Never mind, found it - ConocoPhillips :stupid:


----------



## gibor365 (Apr 1, 2011)

Moneytoo said:


> Who's COP?  You didn't mean Coro Mining Corp, did you? I'm sure there're a few users here whose net worth is larger than their 3.19M market cap lol
> 
> Upd. Never mind, found it - ConocoPhillips :stupid:


I didn't specified exchange as thought it's obvious  COP market cap is $47.7B , not sure any user's net worth is even close to it 

So far this is the biggest hit to my income stream, my dividend income annually will be reduced by about $400 by this cut...
Somehow I expected it, but not 67% cut .... Was thinking at some point sell COP and buy XOM , maybe will do it in future as XOM has now higher yield and will be the last one in O&G space who may cut dividends.

P.S. On the other hand cannot complain that I was buying COP from 2011 ... even after today big drop and div cut, I'm up on this stock 40% (considering PSX spin-off and FX rates)


----------



## Moneytoo (Mar 26, 2014)

Yeah I know XOM, but was never interested in COP, and because you put it together with POT - assumed it's also a Canadian stock 

So we own 4 dividend cutters now - CPG, HSE, NE-N & POT - wonder who's next...


----------



## gibor365 (Apr 1, 2011)

Moneytoo said:


> Yeah I know XOM, but was never interested in COP, and because you put it together with POT - assumed it's also a Canadian stock
> 
> So we own 4 dividend cutters now - CPG, HSE, NE-N & POT - wonder who's next...


I also hold those (except NE-N)  ... + couple of more (small positions), so fare the biggest hits except COP, was HSE (-$200 in dividends/year)


----------



## Eclectic12 (Oct 20, 2010)

londoncalling said:


> ... Not surprised at the suspension but didn't expect the Share price to tumble with it.


Why would the share price tumble be a surprise?

Where one buys a car to get around town, if it is totaled in an accident so it can't move - is one surprised the value goes down?

I can recall articles in the early 80's referring to the premium investors were willing to pay for stock income so when the income is stopped dead instead of cut - IMO, one should expect a stampede for the exits. A cut likely implies there may be a recovery in the future where I suspect a lot of investors see a full stop as desperation.




londoncalling said:


> ... With REITs one should want to buy the popular and loved as opposed to being a contrarian.


Not so sure about that ... I did buy big but the few smaller players I liked, had good value. The bigger players who bought them up at a premium seemed to thinks so too. :biggrin:

Too busy a life right now to be on the lookout again though ... each:


Cheers


----------



## doctrine (Sep 30, 2011)

TORC Oil and Gas cuts their dividend. 

http://www.stockhouse.com/news/pres...-revised-dividend-and-updated-capital-program


----------



## Davis (Nov 11, 2014)

Dream _OfficeI _REIT is cutting their distribution by one third from $2.24 to $1.50, and suspending the DRIP program to prevent dilution. http://www.theglobeandmail.com/repo...ell-12-billion-of-properties/article28806112/

[Corrected -- as gibor points out, it is Dream Office, not Dream Global, Dream Industrial, or Dream Puppy Kennels or whatever other funds they have.]


----------



## gibor365 (Apr 1, 2011)

I think it's only D.UN, DRG.UN declared same dividends


----------



## pwm (Jan 19, 2012)

*Enerplus* dividend just went from 0.03 to 0.01.


----------



## doctrine (Sep 30, 2011)

Prairie Sky cuts dividend by about 45%

http://www.stockhouse.com/news/pres...5-fourth-quarter-and-year-end-results-adjusts

Still one of my favorite mid/large caps. Nil debt, and the new yield (3.2%) is probably realistic for the current oil price.


----------



## 0xCC (Jan 5, 2012)

Bonavista (BNP) announced a change to their dividend last week from $0.01/month to $0.01/quarter, a 66.67% reduction.

http://bonavistaenergy.com/investors/news-releases/article/?id=2034834


----------



## Davis (Nov 11, 2014)

Liquor Stores LIQ cuts dividend from $1.08 to 36 cents. http://www.liquorstoresna.ca/Portals/5/documents/Press Releases/General/Q4 2015 - Press Release.pdf
“In order to invest in our Seven Point Plan and grow the Company with store acquisitions, new store development and renovations, we need to invest capital and maintain a strong balance sheet. As a result, the Board of Directors has decided to change the dividend to allocate about $18 million annually to finance the Company’s growth plans."

I'm going to drown my sorrows now....


----------



## Eclectic12 (Oct 20, 2010)

Interesting ... this sounds like proactive management where they are leveraging the broader dividend cuts to potentially minimise the impact. Cutting the dividend when the rest of the market isn't would likely be a bigger hit.

Sort of like the insurance company deciding "where we have to take a hit on mortgages anyway, let's go for the maximum hit ... any sort of working out the mortgages can be a success story".


Cheers


----------

