May set records for S&P 500 dividend cuts, with 18 companies suspending and 5 others reducing. They were joined by 3 non-US essential services providers from our Utility Report Card coverage universe.
AusNet Services (ASX: AST, OTC: SAUNF) raised its semi-annual dividend for payment in June by 4.9 percent. But the Australian electricity distribution utility also issued guidance for a payout cut of -7 to -12 percent for the next 12 months.
Calendar Q4 earnings results are almost all in for the nearly 200 essential services companies in our Utility Report Card coverage universe.
Takeaway one: Except for the handful of weaklings headed for bankruptcy like Frontier Communications (NYSE: FTR), most are thriving and dividends are safe.
Energy pipelines are the highest yielding sector in our Utility Report Card coverage universe. Ironically, after a five-year bear market, dividend risk is actually quite low for the handful of companies and master limited partnerships we track.
It’s survival of the fittest in the communications sector. And as rising competition, surging capital spending and tough regulation shrink free cash flow, the wave of dividend cuts is hitting all but the largest and strongest players.
Deutsche Telekom (Germany: DTE, OTC: DTEGY) cut in its annual dividend to 60 Euro cents, from last year’s 70 Euro cents rate. The move surprised us because business is good.
Buckeye Partners (NYSE: BPL) exited the Endangered Dividends List last spring, following its all-cash takeover offer of $41.50 per share from Australia’s IGM Investors in May. Last week, the deal inched closer to a fourth quarter 2019 close, as the Committee on Foreign Investment in the US and Pennsylvania Public Utilities Commission signed off.
Just because someone is offering doesn’t necessarily mean anyone will buy. That’s the hard lesson for shareholders of retail energy marketer Just Energy Group (TSX: JE, NYSE: JE). The stock has lost nearly -70 percent of its value since management announced a “strategic review” due to “outside interest” in early June.
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Roger's current take and vital statistics on more than 200 essential-services stocks.