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Ferrellgas Partners LP Message Board

  • MichganNative MichganNative Jul 30, 2005 7:00 AM Flag

    Can someone explain...

    How can this company keep paying such a large dividend with negative earnings? I own a few shares and am wondering if it's a smart move to buy more, but I don't understand this negative earnings high dividend equation.

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    • they don't may a dividend. mlp's pay out as a distribution FFO funds from operation which passes thru the depreciation.

    • they are liquidating. pay attention.

    • You people just dont get it, its not a game, this shit can't keep going as is. Can't keep robbing Peter to pay Paul. Don't most companys strive to gain business, not try to minimize losses all the time??????

    • if you really are on the frozen tundra, I got one question for you. ARE YOU READY FOR SOME FOOTBALL?

    • YES.........SKEE DADDY

    • Let's review some of the last few postings....

      1. Stock price continues to hold.....
      2. Investors are happy with their dividends (distrution)....
      3. Employees are being let go and offices closed to save money....
      4. Customer losses are extremely high.....
      5. Assets are being sold off like never before....
      6. Everyone is hoping for a cold winter....
      7. No one knows how the gas with be delivered due to #3....
      8. The new business model has had millions of dollars invested in it yet the employees say it is awful (at least the ones who are brave enough to speak up!)....

      Conclusion......investors are happy.....employees and customers are not happy. Without employees and customers, what do you have?

    • Let me guess, more like you coming in our garden pissing on our flowers joy. I for one see no danger of losing divi, as this co. has paid it out for well over forty straight quarters. Not bad in my book. Perhaps the "new business model" needs some new employees to run it right? Just a thought.

    • The coverage ratio on the distribution has been well below 1.0x (close to .65x). For those of you who know nothing about MLP's and base investing on the yield, what it means is that they had to borrow cash to pay the distribution. Jim Ferrell was more or less, forced to re-subordinate his units, giving the common unit holders preference. Essentially, he is forgoing his distributions so that the common holders can receive them, because if the common units fail to receive their distributions, FGP has no equity market to turn to. The fact that Jim Ferrell was forced to subordinate his units means that FGP will not be seeing a increase in the distribution for a long time. Look at holders of Inergy (NRGY) that have seen their distribution basically double over the past 3 years as well as the unit price do the same.

      And to let you know, FGP doesn't pay a dividend, it pays a distribution, which is drastically different. If you have actually owned FGP(or any MLP) then you can attest that the pleasant K-1's are not anywhere near 1099's.

    • Sorry bigo....I don't mean to piss on your flowers but sometimes the truth hurts and it appears you just got hurt.....

      Like I said.....investors are happy! Good for you! Customers and employees are not happy. Bad for FG. Your comment about needing new employees may be somewhat true.....the problem is that FG is getting rid of a lot of good people and bringing in part timers........oh well, I guess as long as you get your dividend (distribution), you don't give a crap about anyone or anything else.

    • Ferrell cannot continue to operate with a distribution coverage ratio below 1.0x. The cash either has to be borrowed or the subordniated holders don't get paid. That is fine and dandy until the ESOP no longer gets distributions and the employees have already seen a halt in the contribution matching and now the subordinated units aren't receiving distributions. This cannot continue for long. The same thing happened to Star Gas (SGU). Everyone said, they've paid the distribution for x number of years...and suddenly the game ended for them and Star gas dropped 75% in one day and then they were all crying that they never saw it coming despite the numerous warning signs. FGP has a high yield for a reason, the reward has to be great in order to compensate for the risk. Most investors are not smart enough to realize that the market prices risk into the yield. GE has a low yield because people know GE is a AAA rated company, FGP has a nearly 10% yield because it has a lot of risk involved in it. They will not drive the price up to the point that the yield is low, because they could easily buy an MLP like Kinder Morgan that has increased its distribution just about every quarter for the last 5 or 6 years. All the simpleton investors see is a fat yield and they think that FGP is a gravy train, without ever asking why the yield is so high. In fact, many investors think an MLP with a higher yield is better than one with a lower yield, never thinking that the MLP with a lower yield gets a higher valuation because they are growing and increasing the distribution every quarter. Look at PAA, it just raised its distribution from .58 to .65 in just 1 quarter. How long has it been since FGP raised its distribution?

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