Endangered Dividends List

We’re still waiting on our first 2022 dividend cut in the Energy and Income Advisor coverage universe, versus 93 companies that reduced payouts at least once during 2020 and 2021. That’s thanks to the immensely favorable combination of industry-wide financial conservatism since mid-2019 and the upturn in the energy cycle.

The number of 2022 dividend cuts in the Energy and Income Advisor coverage universe is still zero. That remains welcome news indeed versus the 93 companies that reduced their dividends at least once during 2020 and 2021. And it’s thanks to both the industry-wide financial conservatism since mid-2019 and the upturn in the energy cycle.

Earlier this month, global oil prices hit a 13-year high of nearly $140 a barrel. This week, they’ve backed off substantially. As this issue of Energy and Income Advisor goes to post, Brent crude has dropped back to a level just north of $100. And West Texas Intermediate Crude at the Cushing hub has come back to the mid-$90s.

Some 93 companies under EIA coverage cut their dividends at least once during 2020 and 2021. So far in 2022, that number is zero. And there’s good reason to think it may stay there in coming months.

There were no dividend cuts announced in our Energy and Income Advisor coverage universe since the previous issue. But we continue to advise caution with all of the companies on the current list in advance of their Q4 results and guidance updates, including those that have already declared dividends for Q1 2022.

BP Midstream Partners LP (NYSE: BPMP) has now reached a formal agreement to be acquired by general partner and 54.35 percent owner BP Plc (London: BP, NYSE: BP). The final terms are for partnership shares to be swapped for 0.575 American Depositary Shares of BP, with an expected close of the transaction sometime in Q1 2022 following a unitholder vote.

Two companies previously on our Endangered Dividends List have announced cuts since the previous issue of EIA. Phillips 66 Partners’ (NYSE: PSXP) unitholders will see their quarterly payments reduced to 46 cents a share, a -47.4 percent haircut from the current 87.5 cents.

Dividend risk of all companies currently on our Endangered Dividends List.

There have been no dividend cuts since the previous issue of EIA. There are also no additions to the list in advance of the release of Q3 results, which for our coverage universe should mostly be reported in the next three to five weeks.