Sustainable DividendsSome of these energy companies, lets use ARX as an example, can't afford to have SIGNIFICANT sustainable dividends. (2.8% chump change dividend)
The last series of share buybacks were around $25.50 + Trudeau Tax = $26.00
The stock was just trading in the $23 dollar range, and this is suppose to be a good investment for shareholders?
This is while ARC has a bloated workforce, that dwarfs TOU, staff selling their genous options into the market. Look at the value of ARX sales into the market, and tell me that management team should be paid more than the management at Kelt, not in my books.
ARX was wasting capital while they had billions in hedge book liability on the books, and that is why the economics were so poor and they could not raise the dividend.
The ARC philospy was the dividend would increase as the share float decreased, it just not working out for shareholders, you would do better collection a 5% gic in my opinion.
If you evaporate the cash off the balance sheet buying expensive buyback shares, for sure your dividend will not be sustainable in bad commodity price time. The cupboards will be bare and your have made impossible for someone to consider your stock for income purposes.
ARX has the worst management team in the industry bar none, and their postage stamp NE BC gas plays are not attrative at all.
IMHO