04-30-2020, 09:37 AM
(04-30-2020, 09:25 AM)Otter Wrote:Yeah we just discussed Statoil a week or so ago. I wasn't aware they were actually a major until it was pointed out. Some companies are determined to set themselves up for long-term failure to support their Divs the enxt few quarters. Massive debt and bad credit ratings for a decade is not doing shareholders any favor. I am noticing a lot of Div cutters SPs were not harmed for more than a few weeks. They'll almost surely spike back up when they restore the dividend. I don't like to hold many of them because I desire the income now, but the reality is I'm likely no worse off in a year if the company was sound. SKT is burying themselves short of a miracle like being acquired.(04-30-2020, 08:58 AM)fenders53 Wrote:(04-30-2020, 02:47 AM)crimsonghost747 Wrote: Sold all of my RDS.They would not have been my prediction for the first true oil major to cut. Probably an ominous sign for what next earnings reports bring. Reality is they all need to trim the Div starting about a quarter ago. I'm not wishing that on anyone of course, but borrowing the Div for long would be a mistake. It appears a couple of the majors are going to do just that.
That div cut, this big and this early, together with the suspension of the share buybacks just makes me think that the management doesn't see any way out of this.
For the moment I will take my losses (yay some losses so no taxes!) and rethink the situation with them. I do like the company as a whole so I may very well buy back into it at some point.
It was my intent to wait for a few majors to cut before I re-enter oil. No other sector has beaten me up so bad. I am going to get a huge margin of safety or I'll skip it.
Equinor cut first, and Ive always considered them a major. Norway's sovereign wealth fund depends heavily on them (used to be Statoil).
They and Shell are making the smart move for the long term. Conserving cash right now will be key to future growth and profitability in this sector. Chevron and Exxon are setting themselves up to be financially engineered debt vehicles to support dividend payments that haven't been covered by free cash flows for years (much less at current crude pricing). There comes a time where prioritizing the dividend is actually detrimental to the company's long-term prospects. SKT is being stupid about this at the moment, too, having maxed out a credit facility just to scrape by with another quarter's payment. That credit could have been saved to give the underlying business flexibility when it needs it most.