Endangered Dividends List

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.

There have been no dividend cuts since the previous issue of EIA, leaving the year-to-date total at nine. We are, however, making several changes to the Endangered Dividends List to reflect the impact of Q2 earnings, guidance updates and market developments.

Since the previous issue of EIA, two coverage universe companies have announced dividend cuts. That brings the total number this year to nine, a small fraction of last year’s reductions but also a clear demonstration there’s still danger to dividends at this stage of the cycle.

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.