RE:Dividends CJ is making decent money at this oil price, though just enough to pay the dividend.
The dividend is too high, consuming all their cash flow and leaving no buffer. So chances of cut with normal exec team would be 90%. However, this team has shown a willingness to keep the dividend even when the payout far exceeds cash flow. They will borrow to pay it as they have in the past. So I would say that the chances of a cut with this team at this point is 10% at best.
There would have to be multiple other companies cutting before CJ will. That's not to say it's necessarily a good buy. If the price of oil goes down, the market will punish a company paying out this much cash more than one that is not doing that. Cash becomes more valuable as cash flow declines. Taking on debt to hand cash out to shareholders risks the viability of the company and the market will not approve. So it will fall much more than the yearly value of the dividend within a session or two. On the other hand, if the price of oil stabilizes or goes up, CJ has nice torque for cash flow, so the share price should recover.
It all depends on the price of oil. Place your bets.
Personally, I like the macro for oil from here. Energy pricing should be stronger as the year wears on.
egee wrote: Now that bir have cut divy by 50%
how safe? 1-10. 7(my guess)