Tidewater Midstream and Infrastructure Ltd T.TWM.DB.A

Where is our December Quarterly Dividend?

[pierrelebel]

Based on previous declarations, it should have been declared this morning before the market opens.

Where is the announcement?

With the market closed on Monday and Tuesday I believe it is now too late to declare for payment this month.

[pierrelebel]

The answer came in quickly! "Concurrent with the approval of the NCIB, the Board has elected to suspend its quarterly dividend of $.01 per Common Share to help fund the NCIB while enhancing the Corporation's financial flexibility. The Corporation believes that a combination of growth, Common Share buybacks and a conservative balance sheet can help increase shareholder value."

[pierrelebel]

The decision to "suspend" the quarterly $0.01 dividend makes little sense. TWM will receive about $15 million in dividends from the new shares from Altagas and it only cost about $17 million a year to continue $0.01 per quarter on TWM shares. What am I missing?

[Mephistopheles3]

I'm not sure on this one - I don't really personally care about the dividend as I believe in the growth and free cash flow, but investors typically are not fans of divvy cuts, regardless of circumstance.  NCIB is nice and all, but they now have lots of money after closing Altagas  (which is great news btw - not there was any doubt at this point).  So like you, I think I

[Tyee1989]

It's not that TWM cannot afford to the pay the dividend. The shares are Less than half of what they should be at so management is going to take advantage of that by buying back shares at an extremely discounted price which will eventually get shareholders way over a ten percent return instead a four percent yield. TWM will now carry close to zero debt. The LCFS shares they own are worth about

[TVR]

Eliminating the dividend is probably not a smart move by management.  Will not be surprised if selling by shareholders who dump the shares when the market reopens after Christmas holiday because of the dividend cut overwhelms the very positive news from the Pipestone sale. Talk about shooting yourself in the foot. However, if the share price tanks they can do buybacks at a lower price. I

[Tyee1989]

Usually when people sell due to dividend cuts it's because the company is having significant financial trouble. In this case management is trying to take advantage of a stock price  that is extremely low compared to what the company is actually worth. They could pay a ten percent dividend but it is better for the long term of the company to buy back ten percent of the shares instead due

[Ogopogo26]

They could have done the NCIB without the dividend cut, they have ample liquidity now. In addition they are limited to 25% of the average daily float, so about 100,000 shares per day based on recent daily turnover; with 200 trading days they would only be able to purchase 20 million shares or max. 5% of outstanding shares in a year.

[TVR]

The interest saving alone from paying down $650 million of TWM or Renewbles debt will be something in the order of $40 million plus which would cover 2 years worth of NCB  repurchases. They do  not need the dividend saving for this so something does not add up.

[Ogopogo26]

Don't forget that they lose about $50-60 million in EBITDA so for cash flow, this deal is at best marginally accretive (they also save about $8 million in lease expenses), but as I have said before, there is a timing issue, Pipestone gone as of today, full interest savings take some time with liquidation of ALA and CB in September 2024.

[Ogopogo26]

And the cash flow from this deal goes into TWM, not LCFS - separate company, so can't use that for paying down debt at LCFS. It will eventually eliminate all outstanding debt at TWM.

[Tyee1989]

Typically volume goes up fifty percent or more on small caps when the company is doing a share buy back as they are adding to that volume. I would guess they'd get back 30 mill or so in 2024. IMO

[Ogopogo26]

Don't panic, I am in the same boat, hate losing the dividend income, but would not sell shares below $1 and certainly not next week, Wednesday being the last day for tax loss selling and most likely lower liquidity due to the holidays. If anything, at $0.95 level I would pick up some more shares ... I expect more corporate transactions and positive news flow for 2024 and a materially higher

[faraway1]

Keep in mind that there may be institutional holders out there that must sell as their mandate would be to hold only dividend paying stocks. So they will become sellers prior to the NCIB coming into play.  Thus, in the short turn, it seems inevitable that the stock price goes down. To put things into perspective, paying the dividend would have cost them $4.3 million while completing the

[energee]

Agree with your comment on management. Trying to do too many things and lack of focus. All about salaries, shares flat-lining at best.  Would not touch.

[pennydredful]

shows  total  disrespect  to  shareholders  . 

[Ogopogo26]

Dividend was about $17 million per year, not $4.3 million 

[faraway1]

The quarterly dividend was $4.3 million. Hopefully. they will revisit the dividend decision in the near future.

[rustyblades]

I think the suspension of the dividend is a good move. With the share price near $1 +/-, this is a penny stock. Some funds have restrictions and limits on buying low price stocks. In my view, they need to get the share price well over $2 to attract more interest which will in turn close the valuation gap. The best way to increase the share price is through the buybacks. The suspension of the

[NewOpportunist]

I agree with the comments, the dividend does not matter in the overall scheme of things as from here on TWM and LCFS are all about free cash flow, but at the same time it will lead to a rotation of shareholder base, from those that need a dividend paying stock to those that are growth oriented and leaves TWM with the label of being one of the companies to "cut the dividend". First