Energy Transfer LP (NYSE: ET) and Infraestructura Energetica (Mexico: IENOVA, OTC: IENVF) are the 25th and 26th dividend cutters from our Utility Report Card coverage universe in calendar 2020.
The silver lining is management’s decisions were clearly made for preference, rather than of necessity. That’s encouraging for both companies as well as others we track, with the result our Endangered Dividends List is the shortest it’s been all year.
The price of oil has been steady for a while around $40 a barrel and natural gas is over $2.50 per thousand cubic foot. But some energy companies are still downsizing dividends. Origin Energy (ASX: ORG, OTC: OGFGY) is cutting its semi-annual dividend for October to 10 cents Australian. That’s haircut of roughly one-third for the Australian power producer, electricity retailer and LNG investor.
Three Utility Report Card coverage universe companies cut dividends since the June issue of CUI posted. What makes them unique is all of them rate buys, as holding in cash now is sowing the seeds for rich returns over the next 12 to 18 months.
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.
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Roger's current take and vital statistics on more than 200 essential-services stocks.