RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Dividend just DECREASED 56%The CEO said it during the conference call:
"Depending on the opportunities available to us, we can use any excess cash to fund growth, further delever or return it to shareholders through dividends. We're not going to provide dividend growth guidance beyond 2019 in today's call, but we would expectthat over the long term, dividend
growth will be in line with cash flow." I read this as no dividend growth for 2019, and then growing at the rate of cashflow after this.
GregC24 wrote: Slide 10 in that presentation shows how much $$$ they retain by resetting the dividend to 96 cents through 2023 with the amount retained growing each year. If the dividend was going to increase with cash flow then the $$$ retained wouldn't grow each year, it would stay stable. However, if you hold the dividend steady as FFO grows, then the cash you retain by not increasing the dividend grows as well. Or so it appears. I will be very happy to be wrong.
I don't see in the presentation where they state they will raise the dividend in line with FFO growth.
quote=james1975]
Exactly. This year the plan is $2 billion of asset sales
and $1.3 billion of capital investment in new projects. This tells you that they are going to jettison low growth projects and invest in high growth projects.
The Jan 14 presentation is interesting because you can also see that on the utilities side they have a guaranteed 10% return on invested capital from rate base increases, from their
existing business.
One can easily see that this company is lining up their ducks to grow FFO at 10% annually starting after the transition year that is 2019.
And no, they did not state that the dividend was frozen for four years. In fact they state that the dividend is going to grow in line with FFO growth going forwards. This is a very analogous situation to Transcanada in 1998 in my opinion.
YodaLayhehoo wrote: gentlewolf wrote: Assets sold means loss of revenue and that translates to
a higher payout ratio. I expect projects coming online will
at least partially offset the income loss incurred by the asset
sales. And that hopefully will keep the payout ratio from rising
too far above current level. By 'short while' I meant any increase
of payout ratio resulting from asset disposition will be temporary.
They have already addressed this in the last CC. All of their projections for FFO and Ebitda include all of the planned asset sales. They expect FFO to be 850-900 million. Their Dividend costs 270 million. You can do the math and no it won't change unless they miss their projections drastically. I believe they were extremly conservative with their dividend cut because A) They want to rapidly reduce debt and B) they want to get some dividend increses in and move on from here. It looks to me that they can raise 20-25% and still have one of the lowest pauout ratios in the sector.
I found it funny yesterday to hear all the anaylsts talk about the gold merger yesterday. How it was great that the company could now sell some assets and put that money toward higher return projects. That is exactly what altagas is doing right now. They are selling assets for large multiples of Ebitda and putting that money toward projects that return a higher percentage. They are unlocking the valuse of the underlying assets they own. Which were the exact words of an Anaylst yesterday about the newmont and goldcorp deal.
So why is it a good thing to sell assets and unlock the value of the company for Newmont and not Altagas? It's because Gold is a hot sector right now and utilities are out of favor. The sector was targeted and Altagas was the weakest link like when a lion targets the baby or the hurt animal for a kill. Does that mean what the company did or is doing was wrong. The only way to tell is by looking at the numbers. Yes the number..... They are all that matter BS because when a company increases EPS EBITDA PER SHARE CASH FLOW FFO and the stock declines 60%. It makes zero sense and the market is trading off emotion and people taking advantage of that emotion.
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