Dividend and distribution cuts

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Postby broke » 29 Sep 2008 09:47

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.
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Postby Dividend Growth Investor » 07 Oct 2008 17:12

Oct 6, 2008 04:16PM Bank of America (BAC) Reports Smaller Q3 EPS; To Sell $10B In Stock, Cuts Dividend 50%
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Bank Dividends

Postby bribarb » 09 Oct 2008 09:36

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?
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Postby 2 yen » 09 Oct 2008 18:05

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I am expecting the recent $1 increase to be repealed.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. :?
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Postby Subby » 09 Oct 2008 18:14

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:
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Postby Sensei » 12 Oct 2008 04:17

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
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Postby Taggart » 17 Oct 2008 15:14

Financial Times (UK)

Published: October 17 2008

Desperately seeking dividends
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Postby beluga » 24 Oct 2008 09:48

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.
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Re: Bank Dividends

Postby Finance matters » 24 Oct 2008 13:27

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.
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Postby Taggart » 28 Oct 2008 09:36

CNN Money (U.S.)

Dividend cuts eat away at retirement income

Dividend cuts deepen as stocks nosedive, crimping retirees' lifestyles

October 27, 2008
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Postby BRIAN5000 » 28 Oct 2008 10:07

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.
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Postby Dividend Growth Investor » 10 Nov 2008 14:49

ACAS suspends dividend payments for 2008..
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Postby Arby » 11 Nov 2008 20:32

Home Equity Income Trust (HEQ.un) reduces it's monthly distribution from $0.09 to $0.06 effective November 30th.
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Postby Peculiar_Investor » 11 Nov 2008 20:43

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Postby investor99 » 20 Nov 2008 09:49

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.”
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Postby lystgl » 05 Dec 2008 18:47

AET.UN just cut their dividend to $0.15 mo.
Just cost me >$700
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Postby investor99 » 05 Dec 2008 20:35

lystgl wrote:AET.UN just cut their dividend to $0.15 mo.
Just cost me >$700


ouch!
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Postby deaddog » 05 Dec 2008 20:44

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?
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Postby lystgl » 05 Dec 2008 21:31

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.
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Postby 2 yen » 05 Dec 2008 22:17

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.
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Postby lystgl » 05 Dec 2008 22:41

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
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Postby 2 yen » 06 Dec 2008 00:30

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.
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Postby AltaRed » 06 Dec 2008 01:11

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).
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Postby patriot1 » 06 Dec 2008 03:21

That's why Return of Capital is called... Return of Capital.
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Postby lystgl » 06 Dec 2008 11:35

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.
:)
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