I did the calculation, and at this price I get 15.5% AFTER TAX. . .I have held PGH for two years, and love the dividends . . .get foreign tax credit anyway - so we pay 15% for 4 years, then 26% (of a likely higher dividend by then). . .still at 26%, it pays out better than anything else.
What a wonderful deal that is with this going down daily , assets depleting and no way to raise capital without dilluting current shareholders more , dividend has to decrease don't you look at forward earnings they are going down based on estimates on todays price of oil . The companies all admit they have had to slow down expansion plus margins are tighting due to interest expenses now rising and capital requirments based on the PPS are moving towards levels that will trigure breaches .
I will say PGH managements purchase of NG assetes may low some of this . However in 2011 or when the newer pipeline from Alaska is in watch out . Do you realize they burn off where they can NG now .NG was once a drain on profits to get rid of . Qatar is under 80 cents not 8 bucks per mcf like here that leaves allot of money to transport it once LNG is built out . For every arguement to the upside there are ones to the downside . The market wants volitility they are now playing the downside .
Be patient were enterring a bad year for the US markets heading towards recession and the arguements out on deflation / inflation . Either one is bad news for a income stock based on oil and gas revenues in decline .They have never made enough to cover distributions do you think they can do that forever . They were selling shares in a increasing market to cover now what ? The house of cards falls . Be patient and diversify nobody should add here in more than little purchases of 10% what they plan on getting total if they do . I found wonderful deals in CTB , BXC , TSY this August for income plus appreciation this is not there yet .
I will keep my PGH shares . I tried to tell my 87 year old Mother the first day to sell but she insisted on being patient and waiting this out . She is now down 25% in a sector with outflows that would happen anyways without this tax issue . What a mess . She can't even do the paperwork to keep these up . She called the accountant just to address the envolope last year who cried when she finnaly understood Mom couldnt do that on her own after her taxes were prepared . Now there will be no distributions or if there are 50% more is taken in taxes for no services to Canada with no provisions for our low income disabled or elderly on exemptions . They couldnt do the tax work proballey anyways . People were attracted to these like crack they served a basic need to return meaningful amounts on savings to those who need to despertly cover medicines , phones , electric bills in retirement or disabillity . Heck even normal working people raising families looking for a savings vehicle to be fairly stable and pay the car payment . These simpletons should be tossed out of office not have their tails kissed and respected for being so out of touch . The number one job of the finance minsister is to keep calm in the markets . He has constantly inflamed them with Rhetoric thats inflamatory plus done nothing to appease them .
I totally agree. Even if the price of oil drops to $30 and the return drops to 8% pre-tax say, that's still a bargain. And unless the sun turns blue, the price of oil wouldn't stay at $30 very long. I view this as at least a four year hold, and will keep buying if it keeps going down. Best bargain I've seen on the boards this year.