RE:RE:RE:RE:RE:RE:RE:Dividend reinstatement?VET is showing free cash flow at 450 million per year based on prices that are probably close to Q2 pricing . So they will be paying down about 100 to 125 million per quarter. Not bad really. their credit line is termed out to 2024 and the notes are termed out til 2025. So there is very little debt risk at present.
Now 450 million per year yields a nice return of 31% per annum at todays SP closing.
Unfortunately, people wont be able to spend it till a lot of the debt is reduced to about 1.1 billion . which of course will mean about another 2 years .(or hopefully less)
So what to do? Either sell shares as you need to or borrow against their value !!
Needing cash to live I do not relish selling shares at these low share prices. So I borrow against them on a margin account. Certainly not ideal but I do have faith that share prices will continue to rise. A 30 % plus FCF yield should not be sneered at.
Of course I am a bull but I try not to overdo it. Credibility is important !! also assumptions may vary so everyone needs to do their DD (particularly so if you are trying to make a living off these shares)
Lastly, for those who were once taken in by high dividend rates , it is important to remember that those rates were never sustainable. They depended on fresh capital from the DRIP program.
Hopefully ,this time around ,when we do get dividends they will be much more sustainable !!