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Participant ○

This time is different - Dividend cuts

Companies are announcing dividend cuts - or even eliminating dividends - unlike the financial meltdown.  None of my stocks have announced cuts yet.  I saw that Ford was eliminating their dividend, as is Boeing, for example.  

Let's use this thread to share what we know about companies cutting or eliminating dividends.

34 Replies
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Explorer ○○

Re: This time is different - Dividend cuts

CLDT-Chatham Lodging Trust suspending dividend.

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Contributor ○○○

Re: This time is different - Dividend cuts


@KathieL wrote:

Companies are announcing dividend cuts - or even eliminating dividends - unlike the financial meltdown.  None of my stocks have announced cuts yet.  I saw that Ford was eliminating their dividend, as is Boeing, for example.  

Let's use this thread to share what we know about companies cutting or eliminating dividends.


I'll report on the divey aristrocrats whenever the monthly report comes out at the end of the month.

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Explorer ○○

Re: This time is different - Dividend cuts

APLE hotel Reit suspended dividend.

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Explorer ○○○

Re: This time is different - Dividend cuts

IVR Invest Mortgage REIT suspends dividend.

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Contributor ○

Re: This time is different - Dividend cuts

Can somebody advise me what is the best way to find dividend cuts for one's holdings (stocks and mutual funds)?  Thanks.

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Contributor ○○○

Re: This time is different - Dividend cuts


@PaulR888 wrote:

Can somebody advise me what is the best way to find dividend cuts for one's holdings (stocks and mutual funds)?  Thanks.


Individual companies usually announce divey cuts whenever they release quarterly earnings.  Ya gotta monitor those.  OEFs never announce a cut in their distribution - they just announce what it will be.  CEFs, ETFs and ETNs sometimes announce distributions monthly, or quarterly, sometimes yearly, as a projection, but nothing guaranteed.

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Participant ○

Re: This time is different - Dividend cuts

PaulR, I have a free subscription to Seeking Alpha.  They email me news/announcements about any of my holdings.

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Explorer ○○○

Re: This time is different - Dividend cuts

Justin Law at Seeking Alpha monitors the 'CCC' lists of dividend Champions, Contenders and Challengers on a weekly basis but it isn't instantaneous info.  And I probably shouldn't make light but I wonder if one could train Siri or Alexa to stay on top of things.

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Contributor ○

Re: This time is different - Dividend cuts


@KathieL wrote:

PaulR, I have a free subscription to Seeking Alpha.  They email me news/announcements about any of my holdings.


Beautiful Kathie.  I use Seeking Alpha but forgot about my portfolio there.  I updated it very easy and turned on all alerts as well as a daily summary.  Very easy.  I look forward to being able to report any findings.  Thanks. 

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Valued Contributor

Re: This time is different - Dividend cuts

Targa Resources (TRGP), another midstream company, announced a dividend cut last week, to 10 cents a quarter from 91 cents.

The Alerian MLP ETF (AMLP), which tracks the industry, has fallen 62% this year. On March 9 alone, the underlying index fell 27.7%, the largest drop in its history.

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Contributor ○

Re: This time is different - Dividend cuts

Small position for me but disappointment.  I don't like the dividend catch-up.  Things went south quickly,

NEW YORK--(BUSINESS WIRE)-- Two Harbors Investment Corp (TWO). (NYSE: TWO) (the “Company”), a leading hybrid mortgage real estate investment trust (REIT), today announced that the Company has suspended both its first quarter 2020 common stock and preferred stock dividends to preserve liquidity and long-term stockholder value.

“The Board of Directors, together with management, has come to the difficult decision to suspend our first quarter 2020 dividends, as a result of the volatile market conditions related to the COVID-19 pandemic,” stated Thomas Siering, Two Harbors’ President and Chief Executive Officer. “We believe this is a prudent part of managing our liquidity, which is the most important objective for our business in these uncertain times. That being said, we have satisfied our margin calls received to date under our financing arrangements.”

The Board of Directors will evaluate the Company’s ability to pay dividends in future quarters based upon customary considerations, including market conditions. The Company will also continue to monitor its taxable income and take measures, if necessary, to ensure that it meets the minimum distribution requirements to maintain its status as a REIT.

Unpaid dividends on the Company’s preferred stock shall accrue without interest. No dividends may be paid on shares of the Company’s common stock unless all accrued but unpaid dividends on its preferred stock, and any current dividend then due, have been or contemporaneously are paid in cash, or a cash sum sufficient for such payment has been set apart for payment.

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Explorer ○

Re: This time is different - Dividend cuts

Will this make mutual funds like VDIGX vulnerable to wild NAV swings? Essentially, become unattractive, go kaput?

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Participant ○○○

Re: This time is different - Dividend cuts


@Poorfolio wrote:

Will this make mutual funds like VDIGX vulnerable to wild NAV swings? Essentially, become unattractive, go kaput?


No. Wild NAV swings in wild markets, of course, but because of large dividend cuts, no. You've got a well managed dividend growth fund,

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Explorer ○

Re: This time is different - Dividend cuts

Thanks. Reason why I asked is this might reduce dividends going forward making the fund unattractive, but that remains to be seen, of course.


@DJANG0 wrote:

@Poorfolio wrote:

Will this make mutual funds like VDIGX vulnerable to wild NAV swings? Essentially, become unattractive, go kaput?


No. Wild NAV swings in wild markets, of course, but because of large dividend cuts, no. You've got a well managed dividend growth fund,


 

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Participant ○○○

Re: This time is different - Dividend cuts

@Poorfolio 

You may see some reduction in the dividend as companies preserve capital, but VDIGX's holding are generally moaty and well capitalized. I'd have faith they will survive and eventually prosper. 

What has been mentioned so far in this thread is Boeing and highly indebted REITs mostly focused on hotels and lodging. The government may throw them a lifeline, but without that, their very survival is questionable.

 

 

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Contributor ○

Re: This time is different - Dividend cuts

Dividend cuts for REITs will depend on their annual REIT taxable income, as the REIT must distribute at least 90% of this.

But having said that, the leisure, Hotel/motel and retail REITs are going to have a tough time sustaining their dividend if the lock-down continues more than a few weeks, as their tenants will likely see their revenues drop to zero or close to it while fixed costs such as debt interest, insurance, basic maintenance and utilities and some labor costs continue. I looked through all of the Hospitality (hotel/motel) REITs listed on NAREIT and I'd say the average price drop so far this year is running in the 50% to 70% range. HST is the best of the lot at -45%.

Healthcare REITs are a question mark, but with VTR announcing a $2.5B revolver loan is not a good sign. Their tenants increased labor cost for cleaning and segregating while fewer move-ins and increased number of move-outs does not sound good for this group, so I'd not be surprised to see a dividend cut here.

NY based office properties are probably next (think VNO) due to their across-the-board shut down, although many of those businesses may be able to continue to some extent through home working.

Industrials, residentials and storage should be ok for now.

Dividend cuts are coming for those most susceptible to social distancing, if this continues into April and May.

Wish the news were better

BruceM

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Follower ○○○

Re: This time is different - Dividend cuts

Looks like any company that takes a govt bailout must eliminate dividends. 

Oldmike

LINK 

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Participant ○○○

Re: This time is different - Dividend cuts


@BruceM wrote:

Dividend cuts for REITs will depend on their annual REIT taxable income, as the REIT must distribute at least 90% of this.

Dividend cuts are coming for those most susceptible to social distancing, if this continues into April and May.

Wish the news were better

BruceM


Thanks @BruceM . I appreciate your info. May be I'll let OHI go??

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Contributor ○

Re: This time is different - Dividend cuts

Of the 7 HC REITs I regularly track, NHI had the best CF coverage of their dividend and best dividend history....but it's price has been hammered along with all others. Not sure if this is a concern for their business model or just the vortex.

for the others,  LTC and HR had the lowest payout ratios at 74% and 71%, with VTR and DOC coming in at 80% and 88%. WELL is at 99% and OHI at 103%...so based on the cash cushion to cover the dividend in a world of decreasing revenues, OHI ain't looking too good.

BruceM

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