cancel
Showing results for 
Search instead for 
Did you mean: 
     
Highlighted
Participant ○○○

Re: This time is different - Dividend cuts

ABR is killing me. 

I've already dumped BXMT and STWD and NLY. Been holding onto ABR hoping that somehow the market would turn. I've lost too much already to be work dumping. 

0 Kudos
Highlighted
Explorer ○○

Re: This time is different - Dividend cuts

I'm not sure that it was real deal yet. I think he is promoting a deal as opposed to announcing one that actually exists. I think that they are at an emergency meeting stage at OPEN right now, which is still far from a deal. There are a few other links that essentially say the same thing.

https://www.nytimes.com/2020/04/02/us/politics/trump-russia-saudi-arabia-oil.html

0 Kudos
Highlighted
Explorer ○○

Re: This time is different - Dividend cuts

I think they had too much debt. Also, Enable Midstream Partners cut their distribution by 50%. 

0 Kudos
Highlighted
Explorer ○○

Re: This time is different - Dividend cuts

I posted this link on a different thread. But it seems more appropriate here. AS of April 1st there were roughly 57 companies cutting or suspending the dividend since end of February.

https://dividendpower.org/2020/03/27/coronavirus-dividend-cuts-and-suspensions-tracker/

0 Kudos
Highlighted
Follower ○○○

Re: This time is different - Dividend cuts

I purchased CNP via their mandatory convertible preferred CNP-PB.

CNP-B's dividend or $3.50 shouldn't be cut along with CNP's.   CNP-B is trading at a premium to the conversion and yields 13.4%.

Of course I bought these over a month ago so I'm seriously in the red.

 

0 Kudos
Highlighted
Frequent Contributor

Re: This time is different - Dividend cuts


@rpkrpi wrote:

I'm not sure that it was real deal yet. I think he is promoting a deal as opposed to announcing one that actually exists. I think that they are at an emergency meeting stage at OPEN right now, which is still far from a deal. There are a few other links that essentially say the same thing.

https://www.nytimes.com/2020/04/02/us/politics/trump-russia-saudi-arabia-oil.html


Yes we know that. The deal to cut production would have to be agreed to by OPEC countries , Russia and US representatives from the Texas Railroad commission.

0 Kudos
Highlighted
Frequent Contributor

Re: This time is different - Dividend cuts

I read today where TJ Max is eliminating their dividend, they had a pretty long history of dividend increases. Wasn’t real high, but makes me wonder about a LOT of retail companies going forward. 

Win
0 Kudos
Highlighted
Participant ○○○

Re: This time is different - Dividend cuts

I think it is prudent to eliminate the dividend as long as the company has a plan to weather the storm...

0 Kudos
Highlighted
Contributor ○○○

Re: This time is different - Dividend cuts

@PaulR888  Good point about utilities.  That same thought occurred to me, shortly after initiating a position in Franklin Utilities.  I'm adding a little from time to time, but not much.  Wouldn't surprise me at all if the next step after rent and mortgage forebearance is something similar for utility bills.  Not saying that's a bad thing, just something to think about when considering a utility investment.  And even if it's not mandated by a government body, it's not much of a stretch to imagine that a lot of people are not going to be able to keep up with utility bills.  

0 Kudos
Highlighted
Contributor ○○○

Re: This time is different - Dividend cuts

"I read today where TJ Max is eliminating their dividend"

I think this is going to be pretty standard with retailers. The "Corporate Funding" assistance section of the CARES Act requires that those businesses taking low interest and potentially forgivable loans...

"the agreement provides that, until the date 12 months after the date the loan or loan guarantee is no longer outstanding, the eligible business shall not pay dividends or make other capital distributions with respect to the common stock of the eligible business;"

It also prevents the company from buying back stock during this period. This applies to all small business and any business with locally fewer than 500 employees. So this will likely cover restaurant chains and hotel/motel chains. If so, when the coronavirus threat has passed and business activity resumes, it will be an opportunity for these business rebuild without the pressure of having to resume a dividend, but the dividend will likely be resumed in future years. In the meantime, the accumulation of cash should definitely help the stock price. And I have no idea how this will be handled with REITs that must pay out at least 90% of REIT taxable income....or BDCs that have to pay it all out as dividends.

BruceM

0 Kudos
Highlighted
Explorer ○○○

Re: This time is different - Dividend cuts


@astrokng wrote:

ABR is killing me. 

I've already dumped BXMT and STWD and NLY. Been holding onto ABR hoping that somehow the market would turn. I've lost too much already to be work dumping. 


Did ABR cut or suspend it's dividend?  I haven't heard that.  I'm up about 40% on ABR-C, got in at an inter-day dip!  :)

0 Kudos
Highlighted
Explorer ○○

Re: This time is different - Dividend cuts

Reportedly, "Trump" has had success today, Mexico has agreed to cut at lower rate than Saudi Arabia was requesting, so US cutting an additional 300M barrels.  Whether that is 100% factual we will see.  

 

This should have been 300K, not M.

0 Kudos
Highlighted
Frequent Contributor

Re: This time is different - Dividend cuts


@Shawzy wrote:

Reportedly, "Trump" has had success today, Mexico has agreed to cut at lower rate than Saudi Arabia was requesting, so US cutting an additional 300M barrels.  Whether that is 100% factual we will see.  


See details on this thread   https://community.morningstar.com/t5/Market-Insights/OPEC-Cuts-Production-by-10-MMbpd/m-p/692133#M42...

YBB
0 Kudos
Highlighted
Frequent Contributor

Re: This time is different - Dividend cuts

One of my BDCs, GBDC, lowered its Q2 dividend from previous quarter of .33 to .29.  

My sole mREIT, TWO, is a mess.  Its Q1 dividend, apparently to be paid in April is .05.  Previous Quarter was .40.  Luckily, it is a small holding.

0 Kudos
Highlighted
Participant ○○○

Re: This time is different - Dividend cuts

CorEnergy sees dividend dropping to $0.05

https://seekingalpha.com/news/3560331-corenergy-sees-dividend-dropping-to-0_05

 

From $0.75 to $0.05.

Enjoy

0 Kudos
Highlighted
Frequent Contributor

Re: This time is different - Dividend cuts

HSBC bank eliminated their dividend, I believe their were told they essentially had to by the Govt. Was around 6% or so, now ZERO. Will probably sell my position, stock has come down pretty hard. 

Win
0 Kudos
Highlighted
Follower ○○

Re: This time is different - Dividend cuts

I'm a holder of HSBC (roughly 1.7% position, so average sized).  HSBC was essentially ordered to suspend its dividend by British banking regulators, in common with other UK headquartered banks, despite having the vast majority of its business outside that country.  This caused a significant stink which spilled onto the front pages of British papers.  In the longer run HSBC will likely revisit its decision to maintain its HQ in the UK due to this heavy-handed regulatory action.  In the meantime, its cost of capital goes up (and hence whatever one considers fair value down) due to being under this regulatory regime.

 The bank feels fully able to pay its dividends and remain comfortably within required levels of capital, even with the downturn now in prospect.  This is a strong bank, albeit not the best run, and will no doubt make efforts to reinstate its dividend with faster growth as soon as practicable to compensate its shareholders for this regulatory action.  I intend to hold and perhaps add for the long run on any spikes down in price.  YMMV depending on your time horizon, risk appetite and investment goals.

0 Kudos
Highlighted
Frequent Contributor

Re: This time is different - Dividend cuts

0 Kudos
Highlighted
Participant ○○

Re: This time is different - Dividend cuts

Covanta (CVA) slashes its dividend from $.25 per share per quarter to $.08 per share per quarter.

This is the first of my stocks to announce a dividend cut during this crisis.

0 Kudos
Highlighted
Contributor ○○○

Re: This time is different - Dividend cuts


@Win1177 wrote:

HSBC bank eliminated their dividend, I believe their were told they essentially had to by the Govt. Was around 6% or so, now ZERO. Will probably sell my position, stock has come down pretty hard. 


I'm a bit concerned about this, as requiring a private company to not pay shareholders a % of earnings regardless of whether the company BOD agrees or not, is tantamount to government take over. Now, if the government is providing subsidies to the company, that's quite another thing as protection of taxpayer's dollars can be the rationale, and that makes sense.

But absent any government largess, dividends are part of the cost of capital. It is one of the reasons companies who cut their dividend subsequently have a hard time issuing equity. Political figures, particularly those occupying space in the Woke new-left, likely see this rule as a way to keep the 'rich' from robbing the company or some equivalent rationale.

Private Dividends are the decision of directors, not those driven by politics and self interest.

BruceM

0 Kudos
Announcements