RE:RE:$35-37 TodayChad123 wrote: Experienced wrote: What are you guys putting in your coffee!!!!
1....when they cut the dividend the price change was less than $2 the next day
2....oil price is down over a per cent
3...more importantly - SU mgt totally blindsided The Street with the doubling of the dividend. This is never a good thing
4.....with the dividend increase costing about a billion dollars a year mgt has basically confirmed that they have no plan to grow the company especially in areas outside of oil.
And that's a good thing.....
Well I guess it depends on your perspective.
I agree with and you and have posted many times that I believe that those writing the eulogy for oil are decades premature.
That said it depends on what type of investor you are. Many people look at investing as a combination of dividends plus growth in the SP (ie total return). To maximize total return one needs to invest in a company which has a growth perspective. Historically, the P/E ratio the market is willing to pay for a particular company depends on its expected growth rate - the higher the growth rate- the higher the multiple.
My point four in my earlier post is that SU managment has signaled to the market that they are not a growth company and investors should be satisfied is just the income portion of your investment in the company and we will "milk" whatever we can get out of oil until we can't and then we are done.
From my years of experience, this is not a message that the Grownups on The Street want to hear and they will most likely look elsewhere to put their money and over time the SP will languish as a result.