RE:RE:TD Upgrade to Buy- $27 target And I am assuming malx1 answered your question but if not, some excerpts:
the clear read- through, in our opinion, is the potential for a hike in dividend in 2015,
although, as we outline below, this is largely contingent on our underlying assumptions on Syncrude Sweet Blend (SSB) prices, sustaining capital, and operational reliability..... At an SSB price of $95/bbl, COS is only generating enough free cash flow to cover the current dividend, whereas at an SSB price in excess of $100/bbl, it is generating enough cash flow to contemplate a hike in dividend, in our view. If we were to assume that the current SSB spot price of $113/bbl will be sustained into 2015, then the excess free cash flow generated would be ~$520 million (~75% higher than the
current annual dividend of $680 million).
That would translate into an additional dollar per annum dividend which is plenty higher than I have derived for my $35/share by the end of 2015 estimate.
TD talks plenty about "reliability factors" which demonstrates to me that these guys are rookies. Capacity utilization is the right term. Probably washed out geologists or petroleum engineers that ran away from industry to get their MBA's.