Thursday, December 24, 2015

Summary of Dividend Cuts



Christmas Eve, Christmas Ham and Mulled Wine! What could be a more appropriate moment to go through the notified dividend cuts of my portfolio holdings during this year. 


At the moment, my portfolio contains 47 shares from different companies, of which 5 have announced dividend cuts or temporary interruption of the dividend payments. Moreover, if commodity prices remain at that level for a long time, for me, it shouldn't be a big surprise if some other in my portfolio companies, announces the same things.

Let's look more closely notifications of these five companies press releases.

Press Release June 5, 2015 - Baxter International Inc.



Press Release October 28, 2015 - TAL International Group, Inc.



Press Release November 5, 2015 - Prosafe SE



Press Release November 26, 2015 - NCC AB



Press Release December 8, 2015 - Kinder Morgan, Inc.



Let's look next the numbers.



Baxter's and NCC's announcement is not actually a dividend cut, but I take it as such, because it reduces my dividend income.

As calculation shows, my forward annual dividend income will decrease by approximately one thousand euros, a percentage decline of about 6.7%.  When I take into account the dividend tax 25.5% my net dividend income will decrease by around 745 Euros.

As I mentioned above, I wouldn't be very surprised if similar notifications will come more over the next year related my portfolio companies like GLNG, OKE and the COP.

On the whole, I am very satisfied with my dividend income in 2015 (I will come back to that later), but I can say that without these few unpleasant news, the next year would have looked a lot better.

Full Disclosure: Still long BAX, BXLT, TAL, PRS, NCC, KMI, GLNG, OKE, COP


Photo Credit: digitalart/FreeDigitalPhotos.net 


4 comments:

  1. Its never a good announcement when companies have to cut dividend. But its a reality and things happen. Im sure we will see more in the commodities sector if the market remains depressed.

    Anyways...hope you are having a good start to the holidays. Happy Christmas.

    cheers
    R2R

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  2. If oil continues to stay this low then I expect to see more cuts run through the O&G space and I wouldn't be surprised to see more M&A and probably outright bankruptcy from some of the smaller E&P firms. I was disappointed with the BAX/BXLT reduction but the KMI one really hurt. Hoping for a better year in 2016!

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  3. A nice little round up of the unfortunate part of dividend growth investing. It's just a friendly reminder that no matter how great a company is or was dividend are never guaranteed. I went through cuts myself with GE, WFC and IR. Not fun, but I held on to all those positions. Thanks for sharing.

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  4. Bad news is never good to hear when they are associated with investments but it just proves that it is a part of investing. Great reminder to all that dividend investing does come with risk. This coming year, I am pledging to look deep into a company's dividend history and their ability to continuing paying and/or increasing their dividend before adding them to our portfolio.

    Merry Christmas to you and yours Dividend Hawk. AFFJ

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