RE:RE:RE:RE:RE:RE:sold today but will likely be backYour view is to use the extra cash to buyback shares or pay down the debt.
At what level should they buy back shares? As cash flow increases with higher commodity prices so do share prices - last year they bought back 3.7 million shares at 7.05 - that buyback looks good now but two months ago (July 6/23) the share price closed at 6.59 - the buyback did not look very astute at that point - did they pay too much for those 3.7 million shares?
As for the debt - when you compare CJ to the other companies in the oil and gas sector Cardinal has a very low D/CF (0.4 or 0.3 depending on the anlayst) in comparison to other companies - the only other companies with a lower D/CF metric in this space that pay a dividend are TOU/IMO/ERF/POUFRU - out of these 5 Paramount is the only company that pays more that 4% as a base dividend - Toumaline does pay special dividends but those have been declining over the last few quarters.
Right now the dividend is 9.74% and well supported by oil prices and debt level - best thing to do if you feel the dividend is too high would be to sell and buy something you are more comfortable with.