RE:RE:RE:RE:RE:RE:Dividend Safety
At $67 oil there is nothing that will ''Supercharge'' the shareprice. When the Sharerprice was at over $9 last year oil was in the $100 range and CJ was bringing in huge Free Cashflow with no dividend to pay which they then used to knock down debt. Now at $67 oil with a large dividend and capex they are loosing aprox. $4 million per month. If oil prices stay in this range or drop further they can cut Capex for awhile but eventually the dividend will have to be cut.
You have to take a guess as to where you think oil prices are headed. If they stay at these levels or drop more you are lkely better off with much bigger companies like BCE or Enbridge as they are not dependant on oil prices.
Investing in oil stocks for dividends is a risky proposition as oil prices are very volatile and diividends are not guaranteed. There are 9 and 10% yields in other sectors such as REITs etc. but they have there own risks although are much more stable than oil stocks.
There is an old saying that may apply here. ''You have to worry more about getting your capital returned than the return on your capital'' Lets remember that CJ was trading at 40 cents a couple of year ago. Not saying that will happen again but if oil drops another $10 i could see the shareprice easily going down to the $3 or $4 level again.
As a retired person high dividends are nice but you dont want to lose half of your capital while chasing a few more dollars in dividends. If i were you i would seriously consider selling at least part of your CJ shares if you are holding a lot and buying into other stocks that are not tied to volatile oil
prices,
Personally i have sold almost all of my CJ shares as we have seen this show many times before and it doesnt usually end well. This time at least CJ has a quarter of there previous debt and is in a much better financial position than ever before and can pay a dividend even if it has to be reduced at these oil prices.
Good luck to all.