Dividend and distribution cuts

Discuss your favourite picks, broker, and trading or investment style.
User avatar
broke
Contributor
Contributor
Posts: 307
Joined: 19 Mar 2007 20:41
Location: atlantic canada

Post by broke »

kerplunk again
http://money.cnn.com/news/newsfeeds/art ... 0ef2cf.htm
Citigroup says it will sell $10 billion worth of common stock and slash its quarterly dividend in half to 16 cents per share to maintain a strong capital position, in the wake of its takeover of Wachovia's banking operations.
Dividend Growth Investor
Contributor
Contributor
Posts: 133
Joined: 16 Aug 2008 17:23
Contact:

Post by Dividend Growth Investor »

Oct 6, 2008 04:16PM Bank of America (BAC) Reports Smaller Q3 EPS; To Sell $10B In Stock, Cuts Dividend 50%
http://www.dividendgrowthinvestor.com/
bribarb
Contributor
Contributor
Posts: 91
Joined: 27 Feb 2005 09:05

Bank Dividends

Post by bribarb »

Does anyone else share my concern that Canadian Banks may cut and/or stop paying dividends given the mess we are in .I am having a great deal of difficulty trying to figure out how badly hit are banks are or will be. Everyone is saying that the Canadian economy is strong but the markets in Canada are falling more than they are in the States !!
With the bank bailouts are interest rates bound to rise because of all these bailouts?
I think things would be alot clearer if there was not an election soon.
What are the politicians going to say after the election?
2 yen
Veteran Contributor
Veteran Contributor
Posts: 4116
Joined: 09 Apr 2005 09:15

Post by 2 yen »

It's time to start seriously discussing the coming dividend cuts. On the top of my list now is COS. They recently increased to $5 as oil was rising.
I am expecting the recent $1 increase to be repealed. TD is safe, if the recent earnings guidance is to be belived. The other banks, I don't know.
Power companies like EMA should be O.K. Real estate is likely to cut, REI.UN, CUF.UN, FCR. My dog, Boralex (BPT.UN), is going to have to cut because of the wood residue plant closures. Does anyone have opinions on the Canadian dividend players? Basically, what this means is a delay in retirement for me. :?
User avatar
Subby
Contributor
Contributor
Posts: 139
Joined: 21 Feb 2005 21:21
Location: Mississauga, ON

Post by Subby »

If I'm not mistaken, the Canadian Banks are set to report their quarterly earnings at the end of November and beginning of December.

That's much too long to wait... :cry:
Sensei
Veteran Contributor
Veteran Contributor
Posts: 1922
Joined: 07 Mar 2008 21:22
Location: Tokyo

Post by Sensei »

2 yen wrote:It's time to start seriously discussing the coming dividend cuts. On the top of my list now is COS. Real estate is likely to cut, REI.UN, CUF.UN, FCR.
Hi 2-yen,

Sorry to hear that retirement may be delayed for you.The impact of the current meltdown is mainly intellectual for me. Part of my retirement plan is not to retire unless I absolutely have to. I enjoy working. Most people think I'm crazy. :lol:

Just two comments on your post. From my armchair and without having checked, I don't see why the distributions of REITs would be affected all that much by the meltdown. Mainly they rent property which seems like a sustainable business under most circumstances. The main problem I've heard about is the inability to receive short-term funding, but presumably that problem should disappear as credit unfreezes.

I looked at COS, and even under normal circumstances (ie. ex oil price bust), the numbers are just too erratic to make it of much interest. I think I'd play oil through the majors. If you are collecting yen pay cheques, U.S. Exxon, CVX, and Conoco might rebound very nicely and have the cash to pay current dividends.

Cheers
Taggart
Veteran Contributor
Veteran Contributor
Posts: 6893
Joined: 05 Dec 2005 07:34

Post by Taggart »

Financial Times (UK)

Published: October 17 2008

Desperately seeking dividends
User avatar
beluga
Contributor
Contributor
Posts: 263
Joined: 08 Jun 2006 18:07
Contact:

Post by beluga »

http://bigpicture.typepad.com/comments/ ... dends.html

"Read the fine print -- The $250 billion bank recapitalization effectively ends divdiends. I fhtey took the cash -- and they all needed it -- there are no divvies paid until the money ios paid back. No common dividends, no preferred either (though they will accumulate)."

But read the comments since it is disputed to be untrue. Either way, those dividends don't look so safe.

Those banks would be ( http://bailout.uslaw.com/?cat=22 ):

* $25 Billion is going to Bank of America, JP Morgan, and Citigroup
* Almost the same for Wells Fargo
* $10 Billion for Goldman and Morgan Stanley
* $3 Billion for Bank of New York Mellon
* $2 Billion for State Street
* Hundreds of other public and private banks will also received equity investments of up to $125 Billion.
Finance matters
Contributor
Contributor
Posts: 15
Joined: 22 Oct 2008 10:39

Re: Bank Dividends

Post by Finance matters »

bribarb wrote:Does anyone else share my concern that Canadian Banks may cut and/or stop paying dividends given the mess we are in .I am having a great deal of difficulty trying to figure out how badly hit are banks are or will be. Everyone is saying that the Canadian economy is strong but the markets in Canada are falling more than they are in the States !!
With the bank bailouts are interest rates bound to rise because of all these bailouts?
I think things would be alot clearer if there was not an election soon.
What are the politicians going to say after the election?

Banks are not in trouble in Canada. They are anchored by deposits and transaction fees. The 25 B mortgage swap initiated CMHC effectively recaps the banks. They have cash in hand and will not cut dividends unless absolutely necessary. They have money to go shopping for distressed assets so I cannot see why you are even entertaining a dividend cut by any of the major banks.
Taggart
Veteran Contributor
Veteran Contributor
Posts: 6893
Joined: 05 Dec 2005 07:34

Post by Taggart »

CNN Money (U.S.)

Dividend cuts eat away at retirement income

Dividend cuts deepen as stocks nosedive, crimping retirees' lifestyles

October 27, 2008
BRIAN5000
Veteran Contributor
Veteran Contributor
Posts: 9063
Joined: 08 Jun 2007 23:27

Post by BRIAN5000 »

WOW what will she do with only $89,600.00 to live on, poor thing, she will have to raise the rents on some of those Rental properties she owns.
Dividend Growth Investor
Contributor
Contributor
Posts: 133
Joined: 16 Aug 2008 17:23
Contact:

Post by Dividend Growth Investor »

ACAS suspends dividend payments for 2008..
http://www.dividendgrowthinvestor.com/
User avatar
Arby
Veteran Contributor
Veteran Contributor
Posts: 3125
Joined: 20 Feb 2005 19:23
Location: Ottawa, ON

Post by Arby »

Home Equity Income Trust (HEQ.un) reduces it's monthly distribution from $0.09 to $0.06 effective November 30th.
User avatar
Peculiar_Investor
Administrator
Administrator
Posts: 13271
Joined: 01 Mar 2005 14:52
Location: Calgary
Contact:

Post by Peculiar_Investor »

User avatar
investor99
Veteran Contributor
Veteran Contributor
Posts: 1003
Joined: 22 Nov 2006 20:53
Location: Brantford, Ontario
Contact:

Post by investor99 »

Teck Cominco Ltd. is suspending dividends in 2009, saving an estimated $486-million, and cutting budgeted capital expenditures by $730-million.
Teck, Canada's largest base metals miner, also announced Thursday the sale of its interest in the Lobo-Marte gold property in Chile, and a reduction in zinc production at its operations in Trail, B.C.

“Current global economic and financial market conditions dictate that we take all prudent steps available to us to significantly reduce spending,” Don Linsday, Teck's president and chief executive officer, said.

“The measures announced today, combined with previously announced tax savings, amount to $2.4- billion and should significantly enhance our ability to address our near-term debt obligations and better position Teck to refinance the bridge loan [to finance the acquisition of Fording Canadian Coal Trust] when conditions improve.”
The best time to plant an Oak tree was twenty five years ago. The second best time is now.
--
http://themoneygardener.com/
lystgl
Veteran Contributor
Veteran Contributor
Posts: 1642
Joined: 06 Apr 2006 17:44
Location: Alberta

Post by lystgl »

AET.UN just cut their dividend to $0.15 mo.
Just cost me >$700
User avatar
investor99
Veteran Contributor
Veteran Contributor
Posts: 1003
Joined: 22 Nov 2006 20:53
Location: Brantford, Ontario
Contact:

Post by investor99 »

lystgl wrote:AET.UN just cut their dividend to $0.15 mo.
Just cost me >$700
ouch!
The best time to plant an Oak tree was twenty five years ago. The second best time is now.
--
http://themoneygardener.com/
User avatar
deaddog
Veteran Contributor
Veteran Contributor
Posts: 3422
Joined: 19 Jan 2008 19:59
Location: Central BC/Arizona

Post by deaddog »

lystgl wrote:AET.UN just cut their dividend to $0.15 mo.
Just cost me >$700
Is that distribution cut or drop in share price?
lystgl
Veteran Contributor
Veteran Contributor
Posts: 1642
Joined: 06 Apr 2006 17:44
Location: Alberta

Post by lystgl »

deaddog wrote:
lystgl wrote:AET.UN just cut their dividend to $0.15 mo.
Just cost me >$700
Is that distribution cut or drop in share price?
Distribution cut!
60 cents a unit per yr x 1207 units.
Staying optimistic, should the price of oil rebound, so will the distribution, I hope.
2 yen
Veteran Contributor
Veteran Contributor
Posts: 4116
Joined: 09 Apr 2005 09:15

Post by 2 yen »

You should actually be glad AET cut. That means they are running their business properly as a trust. Oil has tanked so the distribution should be lowered. I own COS and expect a 50% further reduction. Not a problem as I know, from past history, that they will raise again when prices rise.
This is what these trusts should be doing.
lystgl
Veteran Contributor
Veteran Contributor
Posts: 1642
Joined: 06 Apr 2006 17:44
Location: Alberta

Post by lystgl »

2 yen wrote:You should actually be glad AET cut. That means they are running their business properly as a trust. Oil has tanked so the distribution should be lowered. I own COS and expect a 50% further reduction. Not a problem as I know, from past history, that they will raise again when prices rise.
This is what these trusts should be doing.
You're right. Besides it's far too late to bail now. All in all I'm pretty comfortable with royalty trusts we have. AET.UN, BNP.UN, PWT.UN
Well, maybe PWT.UN not so much but someone stronger will buy them out eventually. I expect both of the others to cut distributions as well and it is going to hurt in the short run. (paper losses notwithstanding but distribution cuts decrease my annual income and that brings immediate hurt) BNP.UN's distribution, for now, is exactly double AET.UN
2 yen
Veteran Contributor
Veteran Contributor
Posts: 4116
Joined: 09 Apr 2005 09:15

Post by 2 yen »

lystgl...I know what you mean. Retirement income that fluctuates can be very hard to deal with. The only answer I have is to reduce trusts to less than 10% of your income. Yes, you may have less income, but the smaller ulcer that goes with it may well be easier to live with than wild fluctuations. I only own Riocan, Cominar and COS. I couldn't handle the tax uncertainty of trusts and have reconciled myself to COS lowering its payout in accordance with the new tax rules or even more. On the flip side, one or two banks that have good track records may relatively quickly catch up to the yields of some trusts. It depends on one's time frame, I suppose.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Post by AltaRed »

One should assume 'responsible' trust distributions will vary proportionally with their cash flow. Pre Oct 06, many were gaming the system by sometimes (in lean times) funding distributions via new equity (or debt).
User avatar
patriot1
Veteran Contributor
Veteran Contributor
Posts: 4883
Joined: 28 Feb 2005 03:53

Post by patriot1 »

That's why Return of Capital is called... Return of Capital.
lystgl
Veteran Contributor
Veteran Contributor
Posts: 1642
Joined: 06 Apr 2006 17:44
Location: Alberta

Post by lystgl »

patriot1 wrote:That's why Return of Capital is called... Return of Capital.
Return of Capital?
Not in this market! One could only wish! Seen a lot of ours dissipate in the last couple of months.
:)
Locked