2015 was an easy year to maintain dividend. With earnings projected at $1.22/sh for 2016, the choice in a few quarters will be much tougher for them. Are they going to pay the dividend by adding more debt? Can they really slash their cap-ex any more and cut future earnings and proven reserves down any further? Stay tuned.
Both companies are well managed and fairly similar imo. RIG does have a nice stash ($2.5B at last report), but also has twice the LT debt of NE- $8.45B vs $4.16B. Importantly, NE's debt is spread out over 10 years with $200-300m due every year, whereas RIG needs cash for a $1.8B chunk due in a few years that the current anemic cash flow will not cover. Both have debt-to-equity ratios of about 56%.
Anything past 2016 is pure guesswork imo. No one has a crystal ball on where oil prices will be then, or how stable they will be. Hence, how relevant is the Yahoo 2017 $4.52/sh estimate? What oil price is it based on?
If oil prices stay sub-$50/bbl thru 2017, how would CVX make much more then the $1.18 number that is estimated for 2016? And- with such negative cash flow, how can they not afford to look at cutting the dividend?
You become foolish when you think "there is no way to lose". There are always ways to lose an investment, oftne times by circumstances entirely unforeseen. I too believe there is value in NE long term- but if oil prices stay near the +/- $50/bbl for over two years, long term debt becomes a problem.
I applaud your move. Look at the contract drilling revenue this quarter compared to last few quarters. And the number of contracts expiring in 2016 and early 2017. There will be a more chances to buy the drillers nearer the bottom of their 52-week averages in the next 6 months.
Saying 166 is the bottom may be true, but it could also be wishful thinking. In any general market downturn, MMM will follow the market down with most other stocks. As for buybacks- I do not like them, stats in this century show most companies with large buybacks do not buy low, but often at or above the median stock price over time. I would rather a mega-cap like MMM, with stable cash flows, increase the dividend at a higher rate. That yield can keep a lid on price declines, and I would rather have the $ in my hand thru dividends to do as I will with the cash. I can buy more MMM at my discretion.
AAPL is no longer a pure growth story. That boat sailed years ago. The company is way to large to turn on a dime, to increase sales exponentially. So why doesn't AAPL management treat it this way? Look at a McDonalds, an Intel. They have steady revenue streams and cash flow like AAPL, and have grown their dividend accordingly over the last few years. AAPL has at least instituted and increased their dividend of late- but they need to keep the pedal to the ground. Current dividend is $2.28/sh, projected EPS $9.400 that's only a 24% payout ratio, but only a 2.4% yield at $95/sh. How about an immediate increase to $3/sh, and continue to grow it as possible? That is still only a 32% payout, but a 3.2% yld at $95/sh.
And just how is this lower debt and less outstanding shares going to occur with the continued decreasing cash flow? Depreciation and write offs are not a long term answer. These assets you scrap or write off were once helping cash flow and revenue- now they are gone.
lol the people in this thread need to get a clue. You should be playing red or black at roulette in Vegas,
not speculating in a 3X gold ETF. "I think", "I was sure"...
Bump for justice. The amount of bonds tendered so far is well below 50% of the outstanding issues. After peaking above $13 per share the price has steadily eroded over the last month to around $10/share.