I put some more money into BNS today (Scotiabank).
They are down considerably, and they pay a handsome dividend of 6%+. Until things finally settle, I trust Canadian banks will get thru this like they did in 2009.
Honestly no idea. Reading about Texas O&G it strikes me as Wild West. They're regulated by the Railroad commission of all things which basically never denies permits for anyone to do anything, I think I saw that 100% of flaring applications were accepted which is insane.
At my former company a contractor lost their life smoking over an open tank. Many, many 100% flaring operations as well in new developments with no gas takeaway infrastructure.
It's insane.
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At my former company a contractor lost their life smoking over an open tank. Many, many 100% flaring operations as well in new developments with no gas takeaway infrastructure.
It's insane.
Ya, I had a friend who was a driller for 20 years. He went south when our jobs dried up, and he said it was astonishing the lack of safety and procedures down there. Nobody cared, environmental controls were lax etc...
I put some more money into BNS today (Scotiabank).
They are down considerably, and they pay a handsome dividend of 6%+. Until things finally settle, I trust Canadian banks will get thru this like they did in 2009.
All Canadian bank and REIT dividends look huge right now but it's unrealistic to expect them to be paid-out at that levels. I've no doubts, they will have to be adjusted down significantly to historically supportable levels (3-4% for Tier-1 banks and 4-8% for REITs).
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"An idea is always a generalization, and generalization is a property of thinking. To generalize means to think." Georg Hegel
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All Canadian bank and REIT dividends look huge right now but it's unrealistic to expect them to be paid-out at that levels. I've no doubts, they will have to be adjusted down significantly to historically supportable levels (3-4% for Tier-1 banks and 4-8% for REITs).
It will depend on how long this lasts and how much earnings are affected. Most companies will do whatever they can to maintain their dividends, and the banks are definitely in that group.
Far more likely, IMO, that dividend yields return to normal due to increasing stock prices reflating than due to cuts in actual dividends.
(at least for the banks - other companies and industries are a different ballgame)
All Canadian bank and REIT dividends look huge right now but it's unrealistic to expect them to be paid-out at that levels. I've no doubts, they will have to be adjusted down significantly to historically supportable levels (3-4% for Tier-1 banks and 4-8% for REITs).
The Reits will just borrow at historically low rates as required to maintain dividends. The banks will maintain profits, maybe even save on staffing through this. The government is just printing money to keep things moving. Unless inflation on the back end of this increase default rate and puts pressure on there balance sheets they will be fine. If they aren’t fine the governments will bail them out. So big 5 Canadian banks will all hit dividends.
It's in everyone's best interest to do that, but does he even have the ability to mandate cuts?
Of course not. OPEC doesn't give a #### what America wants, and neither does Russia. That won't stop Trump from trying to claim credit when it happens.
Of course not. OPEC doesn't give a #### what America wants, and neither does Russia. That won't stop Trump from trying to claim credit when it happens.
Russia will also happily give him credit to bouy his election hopes.
It will depend on how long this lasts and how much earnings are affected. Most companies will do whatever they can to maintain their dividends, and the banks are definitely in that group.
Far more likely, IMO, that dividend yields return to normal due to increasing stock prices reflating than due to cuts in actual dividends.
(at least for the banks - other companies and industries are a different ballgame)
As one example, CIBC's dividend yield at the nadir of the 2008-09 crisis was pretty much exactly what it is right now. There were no cuts then, and it would take something pretty spectacular for a big 5 bank to reduce its dividend now.
As one example, CIBC's dividend yield at the nadir of the 2008-09 crisis was pretty much exactly what it is right now. There were no cuts then, and it would take something pretty spectacular for a big 5 bank to reduce its dividend now.
Though to be fair, some (I think all) of the banks temporarily suspended their dividends in 2008. A very unique situation for them. But 2008 was much, much worse for the financial industry than this is likely to be - even on a worst case scenario.
Though to be fair, some (I think all) of the banks temporarily suspended their dividends in 2008. A very unique situation for them. But 2008 was much, much worse for the financial industry than this is likely to be - even on a worst case scenario.
Which banks are you referring to? Canadian banks did not suspend dividends.
BMO hasn’t cut their dividend since first introducing it in 1829! Think about what has happened in the world in that time. RBC made something like $13 billion in profit last year so they will have some cash to get through this. Canadian banks like to maintain a payout ratio of between 45-55% of revenue so there is plenty of room to maintain dividends unless there is just a colossal drop in revenue.
Though to be fair, some (I think all) of the banks temporarily suspended their dividends in 2008. A very unique situation for them. But 2008 was much, much worse for the financial industry than this is likely to be - even on a worst case scenario.
Just a week or two ago, I was doing some research for a new fund I am working on, and was looking at the dividend history of a couple banks. The graphic showed both of them having frozen their dividend for 2 or 3 quarters, during 08/09.
Looking at other sources this morning, I see no such freeze. That'll teach me for using a single (and apparently very unreliable) source.
Well then, the point is even more clear and adamant about how determined the Canadian banks are with their dividends.
Thank you for the correction.
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A lot of people have been waiting for Warren Buffett to do something during this market period, and it appears that he has. Berkshire Hathaway sold holdings in Delta and Southwest Airlines. Apparently they're fearful when everyone else is...well, fearful!
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If Air Canada goes below $10, I'll probably buy in to a little position. There's no possible way the government lets the nation's flag carrier go under, and business will recover in time.
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A lot of people have been waiting for Warren Buffett to do something during this market period, and it appears that he has. Berkshire Hathaway sold holdings in Delta and Southwest Airlines. Apparently they're fearful when everyone else is...well, fearful!
And apparently took that money and bought this:
Quote:
A curious rally took hold this week, led by the oil sand’s two biggest names – Suncor and Canadian Natural Resources, which rose by 37 per cent and 45 per cent, respectively, in just two trading days. Trading data show an enormous level of buying in those two stocks – about $1-billion worth in two days – rumoured to be on behalf of a single U.S. investor. In stock forums and on Twitter, speculation swirled that Warren Buffett was the man behind the big trade in the oil sands.
__________________ It's only game. Why you heff to be mad?
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A lot of people have been waiting for Warren Buffett to do something during this market period, and it appears that he has. Berkshire Hathaway sold holdings in Delta and Southwest Airlines. Apparently they're fearful when everyone else is...well, fearful!
Though in fairness, it is possible to be a seller without being fearful.
Especially if he was simply rolling into another position (one that was beat down even more severely).
If Air Canada goes below $10, I'll probably buy in to a little position. There's no possible way the government lets the nation's flag carrier go under, and business will recover in time.
Yeah, the government will not let them fail. They survived 9/11, they'll survive this.
The challenge with buying the stock is trying to determine how quickly, and to what degree, they rebound. Meanwhile all stocks are on sale, so attractive purchases abound. Without having to plug your nose and buy AC.
