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Frequent Contributor

Re: This time is different - Dividend cuts

BruceM, 

I agree!!! I have not sold my position (yet), but am seriously considering it.

I could understand the Govt. "ordering" a bank to suspend dividends IF the bank required a Govt. bailout or "rescue" (such as TARP, etc.). But to just order a bank to stop paying dividends w/o "helping" the bank in some fashion, this to me seems to be an "governmental overreach". I am re-evaluating my position in HSBC. as most of it's total return is from the dividend. Without the dividend, I feel it is NOT a holding I want to maintain. 

Win
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Re: This time is different - Dividend cuts

People Magazine's parent Meredith cut its dividend...

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Frequent Contributor

Re: This time is different - Dividend cuts


@Kaicho wrote:

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.


Only dividends on common stock were suspended. I own 5k in HSBC preferred stock paying 6% dividend. From what I have read 80% of HSBC business is outside UK but it retains its UK headquarters which is why it had to suspend dividend.

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Re: This time is different - Dividend cuts

“ Price of oil will not remain in the 20s because neither Russia or SA economies can survive at that price “

True ... it’s $12 now.
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Re: This time is different - Dividend cuts


@chang wrote:
“ Price of oil will not remain in the 20s because neither Russia or SA economies can survive at that price “

True ... it’s $12 now.

That’s the price of WTI. Brent crude is at 26.

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Re: This time is different - Dividend cuts

RDS.B Royal Dutch Shell Thursday cut its dividend for the first time since 1945, reducing it by 66% to 16 cents a share after first-quarter profit fell by nearly half. The company warned that the pandemic's impact would be more severe in the second quarter.

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Re: This time is different - Dividend cuts

Wouldn't be surprised to see XOM and CVX cut their dividend also. 

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Re: This time is different - Dividend cuts

KTB (Kontoor Bramds) has suspended their dividend for this quarter (and maybe beyond).  KTB owns both Lee and Wrangler Jeans.

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Re: This time is different - Dividend cuts

Lamar Advertising cuts dividends by 50%

Forward yield 2.92%

Payable June 30; for shareholders of record June 22; ex-div June 19.

P. S.  Given the economic sudden stop, it's surprising this didn't happen earlier.  CEO says they will pay out at least the minimum 90% of income required of REITs.

It will be interesting to see what we get from Simon Property Group as they are still evaluating and promised they will pay the minimum, but no further info yet I don't believe.

Also I'm surprised WELL cut their dividend and VTR hasn't.  They have an announcement upcoming I believe.

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Re: This time is different - Dividend cuts

"Also I'm surprised WELL cut their dividend and VTR hasn't. They have an announcement upcoming I believe."

OHI would be my guess for the next HC REIT to cut their dividend as their CF ratios have not been doing very well prior to the virus. Next would be WELL and then VTR whose CFs look a bit better. LTC and NHI both have had good CF progression.

Of course, it really depends on their sourcing of operator revenues and how that fits with the current conditions caused by the COVID-19 outbreak.

BruceM

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Re: This time is different - Dividend cuts

Ventas cuts dividend by ~43%

Ventas (NYSE:VTR) declares $0.45/share quarterly dividend, -43.2% decrease from prior dividend of $0.7925.

Forward yield 4.57%

Payable July 14; for shareholders of record July 1; ex-div June 30.

 

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Re: This time is different - Dividend cuts

Only dividends on common stock were suspended. I own 5k in HSBC preferred stock paying 6% dividend. From what I have read 80% of HSBC business is outside UK but it retains its UK headquarters which is why it had to suspend dividend.

Interesting, they didnt cut the divs on the preferreds.  So the government has no jurisdiction over the preferreds?  If they cut one, i would think they could cut them both off?  Never read any reasons on the discrepancy.

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Re: This time is different - Dividend cuts

Simon Property Group cuts dividend 38.1% from $2.10 per quarter to $1.30 per quarter.  $5.20 per year.  Forward yield 7.63% on today's closing price.

Stock is up big after hours perhaps because this was better than feared by some.

https://seekingalpha.com/news/3587147-simon-property-gains-6_7-after-resuming-quarterly-dividend

 

 

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Re: This time is different - Dividend cuts

Simon in fact stated that they would pay at least $6 in 2020 (subject to how the world develops), with the current payment of $1.30 the first “installment” of that.  Still a reduction from prior years, unsurprisingly, but the company is signaling that they will pay as much as they feel comfortable paying rather than formally rebasing the dividend to $1.30 quarterly.

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Re: This time is different - Dividend cuts

They paid $2.10 in the first quarter.  3 more quarters of $1.30 equals $6.00.  Doesn't mean they can't change it again, but $6.00 for the year doesn't seem an unreasonable expectation.  

Gotta love David Simon's aversion to simply calling a spade a spade.  "We do things differently."  How many times do you hear this on every earnings call he does?  He is a character.

https://seekingalpha.com/news/3587093-simon-property-resumes-payouts-trims-quarterly-dividend-to-1_3...

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Re: This time is different - Dividend cuts

SPG's dividend is also late coming July 24 when historically their 2Q dividend came May 31.

BruceM

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Re: This time is different - Dividend cuts


@Intruder wrote:

@chang wrote:
“ Price of oil will not remain in the 20s because neither Russia or SA economies can survive at that price “

True ... it’s $12 now.

That’s the price of WTI. Brent crude is at 26.


Over 9 weeks later WTI is at 39.6 today. Neither XOM, CVX or COP cut dividends.

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Re: This time is different - Dividend cuts

RDIV, an ETF, cuts its distribution by more tha 50 percent, this is supposed to be a dividend ETF:

06/22/202006/23/202006/30/20200.162100.16210----
03/23/202003/24/202003/31/20200.284260.28426----
12/23/201912/24/201912/31/20190.488040.48804----
09/23/201909/24/201909/30/20190.421990.42199----
06/24/201906/25/201906/28/20190.336140.33614----
03/19/201903/20/201903/21/20190.271080.27108----
12/26/201812/27/201812/28/20180.331400.33140----
09/25/201809/26/201809/27/20180.406220.40622----
06/19/201806/20/201806/21/20180.378740.37874 
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Re: This time is different - Dividend cuts

Its tough to say there's been a dividend cut with an ETF, as the distribution may be lower due to the timing of the dividends paid by the companies it holds....although this quarter's dividend is considerably lower than past 2Q dividends.

RDIV holds the top 60 dividend paying stocks in the S&P 900 using revenue weighting. Scanning down the list, I see a lot of energy and financials, both of whose dividends have not held up very well under current circumstances.

BruceM

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Re: This time is different - Dividend cuts

Wells F. (WFC) is coming out this month with their dividend cut which most investors knew was coming. If they do go ahead and cut down to .20 would buy (for  future) more shares if they drop to $20. IMO down the road they will be raising it as soon as they can. Please do not tell my parents when we get to heaven that I bought bank stock! They lost what money they had in depression in banks and trusted them as far as they could throw the buildings! :)

Copie

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