Are all of you in the thread confused. AZO has a run rate of more than $900 million/year of free cash flow. AZO can afford to buy back $300 million of stock and then some
Why is this a strong buy? The stock has done almost nothing in the past 5 years and the dividend growth is anemic compared to better REITS
I made an initial 200 share investment last week but I'm still studying the company. I agree that the current yield seems too high given the forecast dividend/distribution growth rate. I know the market is not always rational but this doesn't seem right.
What do I like? IMTT! I have had business dealings with IMTT. It's a good business. MIC has owned part of IMTT for a while and recently purchased IMTT outright. Clearly MIC knew the business well and decided to increase their ownership to 100%. I don't know the Atlantic Aviation business but I have flown charter aircraft a fair amount and I can see how the business could be profitable.
What do I NOT like? I hate the renewable energy business. If I remember MIC's presentations correctly, MIC has very long term contracts in place and is adding capital to expand the business which suggests the business is doing well. Still I don't trust renewable energy at this point in time. To the best of my knowledge/research, renewables are significantly more expensive than conventional fossil fuels and at this point in time cannot compete without governmental mandates and tax credits. Those that trust their well being to the government, will be dissappointed! Doing the right thing is not necessarily profitable and I'm not interested in donating capital for "good causes".
Still not sure. The 200 share nibble is intended to keep my attention.
It will certainly hurt shareholders and certainly make almost everyone angry, but my belief is that the best strategy is to slash to the dividend to zero or almost zero. No one knows how long $50 crude oil will last. If $50 crude oil lasts one year or more, slashing the dividend now will subsequently look brilliant in terms of no only company survival but also potentially having the cash to make acquisitions of acreage or even weaker revivals near the depths of the cycle.
I'm a bit puzzled by the upgrade. The 4Q2015 earnings slides show that he distribution cover is 0.91X. Can we really be talking about distribution growth in 2015?
Could you please share the tax characterization of the distributions you received.
What percent was Qualified Dividends?
What percent was Non-Dividend Distributions or Return of Capital?
What percent (if any) was Ordinary Dividends (neither qualified nor non-dividend)?
Thanks for any information you can provide.
" They are not afraid, they are buying and not putting the shares on the market to support stock price because they are still buying."
This comment makes absolutely no sense.
I think we see a clear sign that all is not well at TOO. On April 23, 2013, TOO issued Preferred A shares at a coupon rate of 7.25%. Two years later on April 20, TOO will issue Preferred B shares at a coupon rate of 8.25%. Based upon the 10-year Government Bond, I can argue that an equal credit risk company should be issuing fixed income instruments at more or less the same coupon rates as April 2013. To me, this says that Wall Street believes TOO to currently be a higher credit risk. This may not be surprising given the current price of oil versus April 2013.
I had a typo above, the coupon on the new B Preferreds is 8.5% rather than 8.25%.
All my comments aside, issuing preferreds with an 8.5% coupon may not be a terrible choice when the common stock is yielding nearly 10%. Still, I have no interest in owning the common.
That said, IMO opinion, the company is still somewhat too aggressive with guidance. 5% dividend guidance for each of the next four quarters would still have to be viewed as outstanding growth but would leave TRGP with more cash to smooth the growth if there are some modest disappointments in operating performance due to still sagging commodity prices.
Interesting SXCP increases distribution but the market is pricing stock like a distribution cut is coking. No doubt the industry backdrop for SXCP seems dicey (i.e. market for steel continuous to weaken, US steel makers already disadvantaged relative to Asia, and the dollar keeps appreciating which will increase the US steel maker disadvantage).
If SXCP management truly knows what they are doing, this stock is mis-priced.
No matter what those below have said to the contrary, your comments are right on the mark The external management compensation agreement is absurd and will in the not to distant future kill this gem. Greed is good but the management compensation agreement is out of control.
I looked at this LP for a few days and decided to open a small position. I'm trying to figure out the bear case on this stock. On the surface it seems as though this stock is yielding too much. And as we all know, there is typically......no free lunch.....and if it appears to be too good to be true, it almost always is.
So what is the bear case here? A one-trick pony that may be disadvantaged by the strengthening dollar?
I found the following comment in the 1Q2015 earnings release quite interesting.........
"MIC reported a consolidated net loss, before taxes, of $145.8 million in the first quarter of 2015 compared with consolidated net income of $28.6 million in the first quarter of 2014. The net loss reflects primarily the impact of the performance fees incurred in the 2015 quarter."
Despite any "thumbs down" anyone may want to mark this post.......the above is a pretty telling comment.