RE:RE:RE:One yr from now 15 plus!!jimgeorge
You "negative nellies" make me laugh. How fast did you think WCP was going to raise their divy? A 22% increase is big for a company that wants to grow the divy carefully so they don't have to crater it if commodity prices drop. Beware of companies like CJ with an 8% yield, the market clearly thinks their divy is risky at these levels.
I think the WCP divy is safe at MUCH lower commodity prices, I will sleep well while I take in my $20,000 per month and watch the share price double over time.
But a market needs sellers as well as buyers.
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"Beware of companies like CJ with an 8% yield."
Why would that be Jim? Are you worried about the fact that CJ with over 20 000 barrels per day of production now has aprox. $50 million in debt which at current oil price even after paying the 8% dividend should have all debt payed off in aprox. 3 months. Are you worried about the fact that CJ is currently generating aprox. $330 million per year in FREE Cashflow after Capex? The 8% dividend costs the company aprox. $96 million per year which leaves CJ aprox. $234 million per year after paying the dividend. Are you worried about the fact that CJ has said that after debt reaches $50 million which is right now that they will be paying out half of Free Cashflow in dividends which should increase the dividend to aprox. 8;5 cents monthly or aprox. $1 per year for an aprox. 15% yield? Are you worried about the fact that a nearly debt free CJ has stated and the numbers show that they can pay the current 8% dividend down to oil prices of $55 per barrel?
While i like WCP and was considering buying some after the recent correction as like with CJ i could see the heavy Free Cashflow coming in here and the debt evaporating quickly. This deal i dont really like as it increases debt back to $2 billion and kicks the can down the road for large increases in dividends. It is also gas heavy which i dont really like as gas prices seem to be rock bottom most of the time in Canada. If i was WCP management i would have done a much smaller deal of aprox. $3 or $400 million which would be safer if oil prices crash as debt would not be so large and would allow for larger dividends while still having some growth. If things went well they could have done another smaller deal in another year or so. Much easier to take off small bites one after another than to take a big bite and risk choking.
Everyone has their own likes and while i was seriously considering buying some WCP shares this deal has turned me off as it seems to for many shareholders here. I would rather have a soon to be debt free company like CJ spinnig of huge FREE Cashflow and large dividends for shareholders right now than wait another year or two if things go well like with WCP.
For those who have sold out of WCP over this deal and are looking for another oil company to invest in take a look at CJ. The current high oil prices have put whats always been a good company into by far the best position its ever been with debt nearly gone and huge piles of cash coming in.
WCP was heading quickly in that direction. Kinda of a shame really.