Cardinal Energy Ltd (Alberta) T.CJ

NCIB VS Dividend

[w8asec]

NCIB is far better for shareholders than a high dividend, and I wish our Divy was 4% and the excess money went to buy and cancel shares.

 

When a company pays a huge dividend that money is gone from the company forever, (like having an added monthly debt) (EPS decreases by the divy amount) but when a company buys back and cancels shares the EPS increase, and that increase is present moving forward in every financial statement. 

 

Share price increase from a higher EPS usually, always beats the Divy.

 

Warren Buffet once mentioned that he preferred money staying with the company.

[TheWokeLemming]

Respectufull disagree, as the NCIB hasn't bought a share since November.  At least we get some investor benefit with the divvy and a pretty nice benefit at that!  

[w8asec]

Respecfully, you may have proven my point by using November, since WTI has dropped about 10 % and CJ has dropped by over 20%

[TheWokeLemming]

  But the entire sector has dropped and juniors similar to CJ have often faired worse.   At least we've been getting paid and the divvy also provides a floor for share price.  The NCIB is useless if they don't buy shares.   My opinion only. 

[mickeymouse]

Ok - lets look at a different time frame; Sept 26/22 - CJ closed at 6.67 Oct 26/22 - CJ closed at 9.26 Price increase = 2.59/6.67 = 38.8% increase in price over 1 month Sept 26/22 - WTI closed at 76.72 Oct 26/22 - WTI closed at 88.22 Prce increase  = 11.48/76.72 = 14.9% increase in oil price over 1 month CJ significantly outperformed the commodity price increase over that time period

[JohnnyDoe]

Looks to me like there is concern about the stability of the dividend when oil gets in that mid 70s range.  Personally I think this debate has merit both ways. In this instance I was fine with my 5 cents a month and would have preferred that extra cent being directed towards either debt or buybacks. 

[mickeymouse]

As a shareholder I want some compensation for holding a volatile stock like this - in other words a dividend - I have seen numerous companies start a NCIB when their share price is high - the underlying commodity drops in price and the share price declines with it - the end result is the company has overpaid for their shares and that result negates the miniscule amount of EPS gain from a declining