Endangered Dividends List

Eight companies in our coverage universe have announced distribution cuts since the previous issue of EIA. We expect to see at least a like number by the time the next issue goes to post, as more management teams adjust guidance to sub-$30 per barrel oil. And we’ve accordingly added to the table, which now lists 39 companies from our coverage universes.

Many companies have cut dividends since the previous issue of EIA. The sharp drop in the price of Western Canada Select (WCS) oil was the primary catalyst for cuts at ARC, Bonterra, Crescent Point, Vermilion and Whitecap.

Not all EIA coverage universe companies have released their Q4 results and updated guidance. That’s largely because of the greater detail required to make annual as opposed to quarterly filings.

GasLog Partners (NYSE: GLOP) will pay a Q4 distribution of 56.1 cents per share on February 21. That’s approximately 2 percent higher than the Q3 payment of 55 cents per share. Then in May, the tanker will slash its payout to a rate of just 12.5 cents a share, a cut of 77.7 percent.

Alliance Resource Partners (NSDQ: ARLP) is cutting its quarterly distribution by roughly -26 percent to 40 cents a unit. That follows management’s release of dismal Q4 results, including declines of -14.8 percent and -28.6 percent in EBITDA, respectively.

EnLink Midstream is cutting its quarterly dividend to 18.75 cents per share starting with the February 13 payment, a roughly 34 percent reduction from the previous 28.3 cents. The company is holding in more cash in response to weaker drilling activity in Oklahoma.

The current EDL features 20 different companies. Four of them are natural resource producers, three Canadian oil and gas and one of them a coal miner. Their primary risk is simply realized selling prices for their products, and their ability to offset pressures with hedging and cost reduction.

Endangered Dividends List companies are vulnerable for various reasons. This is our look at some of the stock most at risk of dividend cuts as we approach the end of 2019.

Ensign Energy Services (TSX: ESI, OTC: ESVIF) was the only company in our EIA coverage universes to announce a dividend cut since the November 1 issue went to post. The Canada-based drilling and services company reduced its quarterly payout by 50 percent to 6 cents a share from the previous rate of 12 cents.

There have been no dividend cuts announced in our energy stock coverage universes since the previous issue of Energy and Income Advisor. Three companies, however, halted what had been consistent quarterly distribution growth.