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Ferrellgas Partners LP Message Board

  • tennvol_30736 tennvol_30736 Sep 27, 2011 10:56 AM Flag

    Dividend Cut Unlikely

    With the approx. 17 year consistent distribution track record, something more severe than what has happened up to now will have to occur. Admittedly, higher propane prices have compressed margins but that is cyclical and will presumably reverse and there are more common units. Yet, FGP, although gallons sold declined last year, are still up from they were a couple years ago and were up in the summer quarter. And their marketing of propane autogas is promising. One might add that FGP has strengthened capitalization last year with additional equity and the acquisitions made were likely mostly if not all, equity transactions. One might add to the lenghthening of credit lines at lower rates. I'd rate the odds of a distribution cut as no more than 1 in 3-5 and if there is a cut, it will be modest....o5/qtr or less.

    Don't bet no a dividend decline.

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    • I don't have long term data on gallons sold but the last 4 fiscal years, FGP has sold in gallons: 2011:900M; 2010:922m;2009:874M;2008:839M. M=millions of gallons. Clearly, there has been a declining overall pattern of propane consumption but on the other hand, the statistics from the last 4 years wouldn't suggest propane consumption is exactly going away. I'm hopeful that most of the shortfall in distributable cash has to do with the price increases of volumes purchased in 2011. I'm holding.

    • The only thing more consistent that the distribution is the stream of "dividend will be cut" dribbling posts, on these silly message boards. I've owned this for about 15 years. Almost every quarter I have been regaled by the dividend cuts coming short selling idiots. It's almost a quarterly thing. Peaks after the summer results are announced. Funny thing about propane price changes gyrating profits here. The underlying price paid is "sticky"... When prices rise is eats into the announced earnings less than it would seem... When prices fall the profits increase, and those increases are much greater than the current price suggests, for a longer period of time. I'd rate the possiblity of any divi cut at about 1 %.........

    • Divy is safe, can't say that about the share price.

    • So somehow they will over come a swing of negative $70 million in net income, lose $40 million a year, and continue to pay $140 million per yr in dividends without diluting the yield and with just $7 million in cash...

      Does best Dr. Evil impression: Riiiiiiight

    • The dividend will be increased within a year. I believe you can double your money on FGP within 2 years.

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