Endangered Dividends List

There were no dividend cuts in our coverage universe since the previous EIA issue. That leaves the tally for the year at six, with only 12 names on the Endangered Dividends List. We continue to expect at the majority of this dozen to avoid reducing dividends this year.

Our outlook remains bullish for energy prices and sector stocks. That means we still expect to see a declining number of names on the Endangered Dividends List going forward, with Q1 results the next opportunity for companies to drop off.

Our outlook remains bullish for energy prices and sector stocks. That means we still expect to see a declining number of names on the Endangered Dividends List going forward, with Q1 results the next opportunity for companies to drop off.

With the pandemic’s impact on demand still unwinding, it’s no wonder most energy companies have opened 2021 with conservative outlooks and cash management strategies. One thing that’s missing from last year, however, is a wave of dividend cuts to reflect it.

Energy sector earnings are almost all-in for Q4. And as we had anticipated, a large number of companies—12 in all—have posted results and guidance needed since the previous issue of EIA to exit our Endangered Dividends List.

As we’ve pointed out, most companies were quite proactive last year adjusting to the impact of the pandemic on energy demand. And with benchmark North American oil prices pushing toward $60 a barrel this month, it’s a fair bet management teams’ confidence has increased that current dividend levels can hold.

Sometimes, the best news is no news. That’s the case so far with the latest round of dividend declarations, with zero Energy and Income Advisor coverage universe companies announcing payout cuts.

There were no dividend cuts announced in our coverage universes since the previous issue of Energy and Income Advisor.

There were no dividend cuts announced in our coverage universes since the previous issue of Energy and Income Advisor. That’s because declaration dates for winter payouts aren’t until next month. But there is growing reason to expect far fewer reductions this year than in 2020, or in fact any year since oil prices first broke under $100 per barrel for the cycle back in mid-2014.

Navios Maritime Acquisition (NYSE: NNA) is the latest company on our Endangered Dividends List to reduce its dividend. As of the February 10 payment date, the new quarterly rate will be 5 cents a share, down from 30 cents a share paid out in early October.