RE:Dividend strategy (Question) You don't base a dividend rate on share price. Yield is the inverse function of price and the dividend. Sometimes a share price falls for reasons other than cash flow problems or for reasons out of mgmts control and those reasons don't always relate to the quality of the underlying business or cash flows.
The idea of a floating dividend isn't new. MLP's in the US do it based on available cash flow that quarter. This ensures they are only paying dividends out of cash flow. Dividend yield is worthless if the equity value of your investment falls far more than the yield. Most E&P companies shouldn't be paying a dividend and the ones with the highest payout ratios are being hit the hardest right now.
There is far too much volatility in the commodity and therefore mgmt teams get stuck with the objective of maintaining their dividend while they don't have the cash flows to do so and end up using debt/DRIP to maintain the dividend rather than using cash flow. Only companies with visible cash flows should pay a fixed dividend and the rest should either pay "special" dividends or a floating rate.
You'll see big changes in the dividend paying space in 2015. Investors aren't going to chase yield in the energy space because they finally realized these businesses can't sustain dividends on a consistant basis and would be better suited to reinvesting dollars into the business rather than diluting shareholders to pay a dividend.