Gibson Energy Inc T.GEI

shareholder return too weak

[TickerTwit]

I've been struggling with the lack of shareholder return from GEI. We're out, swapping for a senior midstreamer that has a superior dividend-growth record. I think GEI is a great company, but the gains in the past 4-5 years have mostly gone to management with little left for the common shareholders.

Gibson management made good decisions over the past few years and turned the company into a better-focussed, more efficient entity. But despite opportunities to raise the dividend substantively, they have not. 3% (net 1% after inflation) is not enough for the risk that we take on. The company we swapped into has 3.5x GEI's net dividend growth rate.

The DRU outcome will be interesting to watch and success with it perhaps will prompt the Board to improve dividend growth. Good fortune to all.

[schocor]

We see this stock completely differently. I see a stable, cash flow machine with unique, irreplaceable infrastructure at one of the Worlds largest energy hubs. Furthermore, this is a North American company with all its assets in one of the few places in North America that still supports O&G (taxes). I am not comparing Gibson to finding a unicorn, but you will understand my point and why it is

[TickerTwit]

Perhaps we do, but semantics may be a concern. Nothing you wrote is about the "stock". You wrote about the company, and there our opinions agree. The company and its operations are high-quality. But how much of the cash flow gain is reaching shareholders? Enough? This is a "stock" (ownership) matter. .

[schocor]

They could pay a higher dividend you are right. They generate signifigsntly more in cash flow than they pay out.  But they are reinvesting in the business which is why they are able to raise the dividend; which they did just last quarter.  what are you looking for here? I think they have a high  yet conservative yield; certainly at the leval i bought in at.    and more

[TickerTwit]

The senior Canadian midstreamer I switched into is an example (above-CPI dividend growth has exceeded 5% for many years, current yield is near to GEI's, and risk is lower). I prefer to not spam/pump unrelated stocks in these boards unless topical value is high.

[schocor]

Well, you have found yuorself to thew board of a high yeilding stock and claimed that Gibson's yeild/growth is not high enough for you to invest. I believe I can speak for the board and state caterogically that "Interest in these unrelated - unicorn - stocks is high and their names provide more than topical value". Please throw out a name of a company that meets your standards; I am

[TickerTwit]

I messaged you directly before you posted your last comment. I will not spam the board. The company is easily identified from info given; there are only two senior Canadian midstreamers, and one of them failed last year's dividend guidance. Feel free to post the company name here and describe how it deserves the "unicorn" label. It's not a characterization I have encountered

[schocor]

His mystery company is Trans Canada energy. Trans Canada energy is great - I own just as much of it as I do Gibson - but investment advisors will tell you to diversify across the space. To that end, Gibson pays a higher dividend yield, reinvests more in projects (lower payout), is 92% Alberta (Biden and taxes) and is more Oil centric vs Trans Canada being more natural gas centric (and just energy)

[TickerTwit]

5.9% vs 5.7% when I last looked. Other factors take precedence for me over such small differences in yield, such as dividend growth expectations and relative risk. I don't rule out owning GEI again in future, if circumstances evolve to motivate it. .

[antonaki1]

This post has been removed in accordance with Community Policy

[TickerTwit]

I base my decisions more on what management has actually done than on what I guess they might do in future. Past performance informs, but guesses do not inform. Your "... will really accelerate it ..." guess was already possible with improved cash flow, but did not happen. I hope to see better in future, but until then I'm swapped out and observing from the sideline. .

[antonaki1]

This post has been removed in accordance with Community Policy

[schocor]

Gibson has the best "pipeline switch" in the business and years or organic growth opportunities in storage construction. There will be future DRU's built in alberta in the next few years, hopefully gibson can keep their first mover advantage.  i believe the alberta government and tce will be owed some money - $1.2b - in damages from the USA after cancelling that construction