Thursday, February 5, 2009

energy dividends going by the wayside

On December 17, 2008 I titled my DIV-Net post "Energy Dividends On The Chopping Block", as I made the case that the extreme drop on in oil prices could cause dividend paying energy stocks to cut their dividends.

Husky Energy (HSE) announced they will cut their dividend from $0.50/share to $0.30/share. The company actually put it a different way, they have 'set' their dividend to $0.30/share. That is a 40% cut. Husky is adapting to a much lower energy price environment. The stock now yields about 4% on yesterdays closing price.

The other stock I mentioned in the post BP, just announced earnings and left their dividend unchanged. The company announced their first quarterly loss in seven years but stated that they can have a break even 2009 with oil prices between $50-$60 per barrel The stock yields 7.8%.

Several other Canadian oil and gas trusts have slashed their distributions including widely held, Canadian Oil Sands Trust (COS.UN).


Anonymous said...

Husky is an interesting case. As much as they cut their dividend by 40% that is only a QoQ cut. Their dividend for Fiscal 2008 is still 1.70 vs 1.41 in F07 (a 20.5% increase) and in the past they have been know to pay a special dividend so if things get better for them in F09 they may still be able to maintain a policy of raising dividends YoY.

Anonymous said...

Highly cyclical business,I never fell for it despite Husky's apparent invincibility. I prefer businesses that aren't cyclical and make money in good and bad times.

Rockon said...

Nice blogs

Anonymous said...

Some of the oil and gas trusts are still paying off big yields.

Harvest (hte.un) is paying over 30%.

Pennwest, around 20%.

Can this last?.......and even if distributions are cut, isnt that a great yield to get for a while?

Oil and gas will have to recover and move higher at some point...closer to $ 60 - 80 range.

Any thoughts on the oil and gas trusts in general??

please post your thoughts.

I own Nae oil and gas...dist just cut from 16 cents to 11 cents, didnt seem to hurt the stock price at all!