I do not know what all the hype on this board is about with regards to the dividend being cut. I have owned this stock for over 10 years and they have always met their dividend obligations. Considering 50% of their production is from oil and the price is (and has been) over $100/barrel for some time now, I do not see too much concern. I realize natural gas prices are low but I believe that this will be offset by the high oil prices. This stock is being driven down by people fearing a dividend cut for some reason or another. I for one am using this opportunity to add to my position. This is a solid company and one of the original Canadian Royalty trusts and they have stood the test of time
Yes, oil is roughly 50% of the revenue, but did it get to be 50% because of a dramatic increase in oil production, or because the price of NG has collapsed? Me thinks a lot of the reason why oil is now 50% of total revenue is mostly because NG prices have collapsed.
Good comments,thank you.Since the chart of this stock shows a long decline from 32 over nine months,I will be watching and waiting for the news that seems to be imminent,probably a div cut,and on that day the drop in price(or on a high volume drop before),will flush out the last weak holders.It's a good place to buy more or start a position,if it happens.Of course,there is the possibility the div wont be cut and the stock recovers,but at this point the rsi being less that 20,the stock is very oversold and things could be coming to a heat very shortly.Anyway I'll be looking for a reversal day to buy.
Someone on the NYSE keeps selling big blocks,looks to me they keep trying to short it.
They will have to cover eventually,this has been a huge move and I would think they would take profits soon on the short side.
I'm afraid I don't delve into the accounts, and I am relying on yahoo, but the EPS quotes is 0.61, and the payout ratio is 344%. Noted for sure your positive comments on the company, its resilient dividend obver 10 years, and its energy mix. But, wondering what's your view on the payout ratio?
2011 cash flow from operating activities = $623,440
2011 Dividends to shareholders = $388,904
Payout ratio on cash operating basis is 62.4%
The Avg. price of NG was much higher during 2011. The question is what is the ratio now that NG is a little over $2.00. I think a divi cut is already priced in.
long term a cut in dividend has got to be healthy for the company, although may be not for the current stock price. the company has some great assets, but i can't see this as an entry point at this time. i think this is worthwhile for a second look in june and see what has settled out in terms of earnings and the dividend.
this is a summery of a new cibc report comparing payout ratios of the former Canroys. ERF rates just about worst.
EPS does not always show how much cash is available to pay divys. ERF has an EBITDA of $3.85 per share.
ERF was always the best of the CanRoys, but as a corporation now they face some different challenges i.e. investing to insure future revenues vs using their cash for divys.
But even if ERF did cut the divy a bit, say to .15 or .16, ERF would still be paying over 7% and would still be an excellent company with a great dividend.
Are you considering this in your calculations?
Most Canadian oil and gas companies were Royalty Trusts ("CanRoys") before changes in Canadian law eliminated them. These trusts were similar to U.S. MLPs in that they avoided corporate taxation by passing most of their income to shareholders. After Canada eliminated these trusts, most converted into corporations. Some may need to further restructure themselves or reduce their dividends in the coming quarters, as many have tax credits that will eventually expire.
I just started legging in to this stock a few days ago.I watched it for years but never jumped in.Just started buying some at $22.11,more at $21.10...And I caught the recent dividend on both purchases.
We still might head to $20,it's really hard to say.But I do think this is overdone and is due for a bounce,I may buy one more batch if we get near that $20 level.
I made a small position at 22.90, but I am looking at adding to PWE and COSWF.pk right now. All of the old trusts, PWE, PGH, ERF and COSWF.pk are looking like good buys atm. PWE and COS have the reserves that I feel will payoff big time in the next few years. Hopefully one will be bought out.