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.

There have been no additional dividend cuts in our Energy and Income Advisor coverage universe since the previous issue posted. Unfortunately, that’s the result of being in between quarterly earnings reporting and dividend declaration dates, rather than any real signs of strength from the companies on our list.

We have become more confident in the ability of several EDL companies to hold payouts level in 2021. That’s induced us to upgrade them to buys, despite remaining risk.

Three companies on our Endangered Dividends List slashed their payouts since the previous issue went to post. None of these moves was unexpected, but only Energy Transfer’s (NYSE: ET) 50 percent reduction was enough for the company to escape the EDL. Still a member of our High Yield Energy List, the company’s generally positive Q3 results and guidance are highlighted in the Feature article.

So far, only a small fraction of energy companies have announced Q3 results and updated guidance for the rest of the year. A much larger number, however, have declared their dividends for the current quarter. And the vast majority is sticking to the same amount they paid this summer.

New Hope Corp (ASX: NHC, OTC: NHPEF) is the only Energy and Income Advisor coverage universe company to announce a dividend cut since the previous issue went to post. That brings the total number to 71 since early March.

Whitehaven Coal (ASX: WHC, OTC: WHITF) is the only Energy and Income Advisor coverage universe company to announce a dividend cut since the previous issue went to post. That brings the total number to 70 since early March.