The reasons I added to Husky here are many:
- The dividend was recently cut, sitting now at a conservative $1.20 per share on 2009 estimated trough earnings per share of $1.80
- Given the growth in China and emerging economies, I like the outlook for oil post banking crisis
- Husky has very little debt and a great balance sheet
- Given the company's ties with China, capital position, smaller size, and aggressive management, a takeover may not be out of the question
- As mentioned previously, if I'm investing in a commodity that fluctuates wildly, I like to get paid regularly, instead of trading in and out; Husky provides this
- If earnings snap back even close to 2006-2008 levels, Husky should be quick to prop the dividend back up
- I also considered an investment in Crescent Point Energy (CPG), however I think Husky offers a better valuation at these levels
9 comments:
Hey MG, what do you think about the companies pattern of divdend payouts.
They both cut and paid out special dividends in a somewhat random nature - this has always make me think twice about the company - even though I'm one of those in the camp that thinks Husky and its payouts are a subtle way for Lee Ka Shing to bump his income from time to time ;)
Sampson. I'm not sure I understand what you mean by 'random'. The pay outs follow the eps, which ~follows the price of oil.
I actually like that about Husky -- they pay out what they can, but aren't afraid to cut when necessary so they don't bleed themselves dry.
The company is well managed and shareholder friendly.
urgh I can't stand holding HSE... it's sooo underperforming PBG, SU and even COS-UN. Why doesn't this POS move? Oil is at an all time high for the year yet HSE can't even go back to where it was back in June.
>Anonymous said:
>urgh I can't stand holding HSE... it's sooo
underperforming PBG, SU and even COS-UN. Why doesn't this POS move?
Would you like me to take it off your hands? ;)
Random wasn't the right word, I was more thinking about consistent. I've always looked mainly at the dividend achievers/aristocrats, and although HSE has paid almost always paid dividends, I feel a bit more confident in companies that follow borrowing but prescribed increases.
Just curious if the up and down of payouts is something you watch carefully? I suppose they have proven that they will pay as much as they can IF they can.
Exactly. I think it comes with the territory. Oil is their lifeblood, so it is what it is when you have a higher pay out ratio. If I didn't want to experience a dividend cut I'd buy Suncor, Encana, or Imperial Oil.
hi.. just dropping by here... have a nice day! http://kantahanan.blogspot.com/
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