Shareholders want to see the Cash.
Share Evaluations I think these companies are going to have to figure out, that to get rewarded with a well valued share price they are going to have to return capital in the form of dividends to shareholders.
Huge Losses on the Books Many have huge losses on the books and the shareholders that experienced those losses firsthand, now is the opportunity for management to rewards shareholders, but they have a long list of excuses because they don’t want to.
Excuses - Net Debt is not low enough
- Never low enough, even in a 2% interest environment?
- Management desire to buy back shares on behalf of the shareholders
- Always can buy back more shares, a share buyback is never done.
- They want to reduce their dividend exposure.
- Capital projects need to be paid for and will consume all cash
- Must come after the shareholders are taken care of, and can add debt to the balance sheet.
- Hedges have destroyed CF and would like them to roll off
- Shareholders are paying double for poor management, covering their butts.
It needs to be the company’s priority to pay the shareholders well they can, to take full advantage of the current opportunity to reward shareholder and quit, putting shareholders at the lowest rung of the ladder with the least respect.
Companies like TOU, POU, and SU have rewarded the shareholders with dividends, and their stock evaluation has reflected this.
Meaningful Share Appreciation Should be the Objective Putting out a 10% dividend is simply a message to the marketplace that your shares are trading at ½ price and the company can support and pay a meaningful dividend. Many of their companies could pay a 10% dividend, and it a message to the market that higher prices are here to stay for commodities. The worst that could happen is that they cut the dividend, and all these companies have done it before anyway.
Management Pet Project Must Go Stop with management pet projects, that do not benefit the share price or the shareholders and push any gains for the share holders’ years into the future. If the stock gets too high, they could sell a few more share and add cash to the balance sheet. When to stock get to low, you are only looking at survival.
IMHO