1. Crescent Point Energy Corp. CPG: On Aug 12, the largest oil producer in Saskatchewan slashed its dividend by 57% to 10 Canadian cents per share. The payout cut – first time in the Zacks Rank #3 (Hold) company’s 14-year history – was accompanied by a suspension in its dividend reinvestment plan and a cut in its capital spending budget by C$100 million. 2. Penn West Petroleum Ltd. PWE: Lower oil prices also forced Penn West Petroleum to suspend its dividend indefinitely after its next payday in Oct. The mid-sized energy explorer, sporting a Zacks Rank #3, also plans to lay off more than 400 employees (or 35% of its workforce), apart from reducing board compensation by 40% and further scaling back 2015 capital spending by C$75 million to C$500 million. 3. Baytex Energy Corp. BTE: Another Canadian producer eliminating cash dividend n the wake of collapsing energy prices is Calgary-based Baytex Energy. The Zacks Rank #3 company said that it will suspend its monthly dividend of 10 Canadian cents, effective after the Sep. 15 payout. Additionally, Baytex Energy scaled back this year’s capital spending to C$500 million, while expecting 2016 budget to be around 25% less. 4. Pengrowth Energy Corp. PGH: Trying to shore up its balance sheet in the face of a prolonged oil downturn, Pengrowth Energy said it would now shell out a quarterly dividend of 1 Canadian cent per share (4 Canadian cents annualized), a 83% reduction from the 2 Canadian cents it had been paying monthly since March (24 Canadian cents annualized). The Calgary-based Zacks Rank #3 oil and gas producer has also decided to suspend its dividend reinvestment plan effective Dec. 15. Preserving Cash Now = Better Investment Later The uncertainty of oil prices means that the future direction of the commodity’s movement is anybody's guess. However, fundamentals suggest that the odds are firmly stacked against a sustained rally. Therefore, dividend cuts might actually be a smart move, even at the risk of shares being sold off on the announcement. It might be wise for investors to take a long-term view of the dividend cut announcements rather than get swayed by the short-term pain that it brings. In fact, the suspension/cut in payouts will ensure that more money can be put back into the company, making it stronger, financially healthier, and possibly a better income investment for the future. Finally, it is in the best interests of the shareholders to sacrifice the dividend rather than hang on to one stubbornly that might ultimately prove unsustainable. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BAYTEX ENERGY (BTE): Free Stock Analysis Report PENN WEST EGY (PWE): Free Stock Analysis Report PENGROWTH EGY (PGH): Free Stock Analysis Report CRESCENT PT EGY (CPG): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
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