That's not correct -- as long as you own the stock before it goes ex-div, you still get the div even if you sell it before payment date.
Tell that to the IRS trying to collect on the tax bill. If necessary, the IRS can simply seize the shares -- or any other assets -- and liquidate until bill is paid off or there are no more assets if LNCO isn't forthcoming with the money and there is no other realistic prospect of getting paid.
if you really want to do some research, Fidelity has good simple annuities for lifetime guaranteed income. Go to their website and see what kind of annuity you can get for your lump-sum payment and compare to monthly payment from your pension... I'd be shocked if your pension wasn't the better deal by a good margin. That said, if social security covers most of your fixed expenses, I'd consider taking the lump sum and buying good dividend-paying stocks that you can hand off to your family when you're gone.
Couldn't help noticing that over last 3 months, ETE is underperforming KMI by **45%** !! This, when KMI issued punitive preferreds at 10.75%, slashed div 75% and completely imploded. In meantime, ETE has maintained distribution, maintained credit rating, cut cap ex & funding needs, and announced no plans to issue new debt or equity, YTD the underperformance is even worse. This is arguably the most hated MLP in the world right now, IMO. The market **really really** thinks a distribution cut is coming, one way or another.
Something tells me the bottom has been set for these MLPs, at least for the good-quality midstream ones with viable business models that aren't dependent on external funding. They've all announced stable or increased quarterly distributions (except KMI); cut back cap ex plans; come up with financing plans for cap ex that don't rely on any more external capital (or have the financing already lined up). Howard Hinds points out that since mid-December, MLPs are actually out-performing the rest of the market, so it looks like even if the rest of the market continues melting down, it's just catching up to the MLPs. Looks like the extreme volatility is just noise, now it's just grind it out quarter by quarter and let your distributions compound. Upstream MLPs are still IMO completely uninvestable, but I think good-quality midstream has stopped bleeding.
revenue was down 30%... but cost of propane was down 39%. Chip in some nice reductions in selling/G&A expenses, and profitablilty is nicely higher with these low energy prices. Nice hedge if you own other MLPs.
they sound pretty clear to me that ETP's 2016 projects will provide meaningful cash growth in 2017, and they can fund all the cap ex with no extra debt or equity. With SXL and SUN (as you mentioned) already in good shape, don't see any reason at this point why ETE/ETP can't just ride this out and let the stock price do what it will.
And btw, even if CHK goes BK, they will still be pumping 100% as much oil/gas as before, and shipping it on the same pipelines... that's the only way creditors are going to get paid anything, it's in everyone's interest to keep the pumps running. Doesn't matter what the price is at that point, so long as they generate enough cash to service the debt. If the bondholders want any of their money back, trying to screw the pipeline companies isn't really in their interest.
Personally I wouldn't mind seeing them sell the SUN interests and GP and use the money to fund other cap-ex or the WMB deal... seems to be a nice enough business, but no particular reason for a pipeline MLP to own a bunch of convenience stores. I think investors would applaud either the lower debt or need for capital markets more + ETE slimming down a bit.
On the one hand, I disagree with the assessment that three years is "long-term" -- if it looks likely that SSW will have trouble re-chartering ships beginning in three years, the market will begin discounting that long before. I would like to know what the debt situation is with those ships -- how much of the original debt is still outstanding vs the residual value of the ships?
On the other hand, SSW isn't really exposed to the spot charter market -- if Shipping Company A only needs 90 ships next year instead of 100, they'll drop the 10 from their spot charter fleet -- they'll still keep a core of ships on long-term lease, and those are the SSW ships.
Also, the ships coming up for re-charter are mostly the smaller vessels 4500 TEU and such, whereas the new ships are all much larger, so the overall impact is lessened.
anytime any stock is down because of the *weather* is almost automatically a good time to buy... if there is any more short-sighted a reason to buy or sell a stock than current weather, I don't know what it is.
I think it's better to work it backwards... say, $0.08/quarter distribution. For 52 million units, and assuming expenses stay flat at $1.5 million, you need about $5.5 million in gross revs, or half of last quarter, which was $11.5 million with $50 oil. Seems like if oil stays no worse than upper $20s, and production doesn't fall off a cliff, should be good for $0.30-$0.35 annually vs the $2 unit price? (of course, longer-term, production will continue to decline, vs expectation of *eventual* price recovery.)
I live in CT and there was just another article in our newspaper today about all sorts of people/towns/groups complaining about plans to build new nat gas pipelines in New England... Kinder (Tenneco) and Spectra (Texas Eastern) are both trying to get different expansion plans off the ground. There's just not enough existing capacity to handle demand. Nat gas prices in Conn are highest in country. I can virtually guarantee that if Chesapeake doesn't want the space on WMB's Transco pipeline, someone else will jump on it.
You're buying the opportunity to be a part of the ETE family, so buying WMB depends mostly on how you feel about that. It's highly likely that once it is part of ETE there will be any number of future transactions/reorganizations within the ETE family. The Transco system is an awesome crown-jewel asset, but not sure this is the best time to be buying MLPs with more debt, rather than less. If the ETE deal actually happens on its current terms and you get the $8 cash, it's not a bad deal; if they wind up not cutting the distribution, could be a really good deal; but a pretty decent chance the distribution gets cut.
that *specific* reason is one reason why I have been hanging onto my shares, personally... my own cost basis is approaching zero, plus the recapture, means my effective tax rate would be high. But people who have purchased more recently will have a much lower tax hit. For me, as long as they stay in business for the next couple of years, I may as well hang on.
a variation on that theme is selling ETE to take the tax loss, then buying WMB to stay invested and capture any rally and avoid a wash sale.
That's not quite true -- it's real investment income from the portfolio, just like the monthly distribution, no difference at all except they're paying it out at year-end instead of monthly. My shares were DRIPped, now my monthly income is magically 9% higher. It's real money. It's not the same as other funds that just pay out return-of-capital.
But I do wish they would simply pay out a higher monthly distribution instead of letting it accumulate till end of year.
If it destroys the company's ability to sell equity and loses ETE's & ETP's investment-grade credit rating -- 20% of WMB's rev is tied to CHK?? -- it's very very questionable if the additional cash flow is worth the cost. Right now ETE/ETP's prospects are better then WMB -- if deal is cancelled, ETE will rally, WMB will sink, and ETE can revist the deal later. We've already established that there are no other realistic suitors for WMB.
Jennifer Warren on Seeking Alpha does the best job of anyone out these in explaining ETE and all its moving parts... whatever other sources of info you look at, you should definitely go to Seeking Alpha and look for her articles. The rest of SA... lots of good stuff, lots of not-so-good stuff. I think a couple years ago the % of good quality contributors was higher and it's getting watered down. But Jennifer Warren for ETE is good (Ray Merola is another good one)