Investing

What do you think about these dividend stocks?

  • Last Updated:
  • Oct 16th, 2012 3:31 pm
[OP]
Member
Nov 27, 2009
319 posts
25 upvotes

What do you think about these dividend stocks?

I have been trying to decide on which stocks to buy to build the energy portion of my portfolio. I am primarily looking for relatively high yield monthly dividend stocks and I am willing to take some risks.
I like the following stocks because they provide a monthly dividend and have been relatively stable over the years.

ZAR
PKI
BNP
PLT.UN

I am fairly new to investing and was hoping to get some opinions on these.
Thanks in advance :)
4 replies
Banned
User avatar
Feb 15, 2008
26318 posts
3210 upvotes
Calgary
They all look like small cap companies that have been burning enormous amounts of their cash resources, instead of shoring up their balance sheets. None of them really excite me, and they don't really look all that suitable as 'dividend' stocks.
Deal Fanatic
User avatar
Dec 21, 2005
5279 posts
517 upvotes
Markham
Musabbir wrote: I have been trying to decide on which stocks to buy to build the energy portion of my portfolio. I am primarily looking for relatively high yield monthly dividend stocks and I am willing to take some risks.
I like the following stocks because they provide a monthly dividend and have been relatively stable over the years.

ZAR
PKI
BNP
PLT.UN

I am fairly new to investing and was hoping to get some opinions on these.
Thanks in advance :)
You have an interesting interpretation of "stable over the years"; 3 of the 4 names are down fairly substantially in 2011 & 2012 (ZAR being the least of the worst, while PLT is ~55% off from its $10 IPO price)

Personally, I think ZAR is too small to continue as a separate public company. Whether it'll be able to get fair/full value for its oil assets is debatable given that most juniors/mid caps are struggling with the volatility in oil prices and increases in operating costs. It had to cut its monthly dividend this year to $0.06/mth.

BNP...I've nibbled at this above $20...luckily got out before price tanked to mid teens. It's much larger than PLT or ZAR (i.e. 10x more production) mainly nat gas production with some nat gas liquids. You're betting on nat gas returning to more sustainable (i.e. >$5) prices. IIRC, BNP did a share issue recently to buy nat gas assets from Fairborne Energy...so there's a group of investors that believe it's worth $16.50/shr.

PLT is a different play -- there's a thread on the "new" US based oil/gas companies listed in Canada, you can do a search for that thread. Basically, you're getting a fairly big dividend (~20%) because a large portion is characterized as a "Return of Capital" -- meaning you're basically getting your money back. The market is betting on a dividend cut, so you might want to wait until they announce the cut before buying in.
:idea: :) :lol: :razz: :D
[OP]
Member
Nov 27, 2009
319 posts
25 upvotes
charliebrown wrote: You have an interesting interpretation of "stable over the years"; 3 of the 4 names are down fairly substantially in 2011 & 2012 (ZAR being the least of the worst, while PLT is ~55% off from its $10 IPO price)

Personally, I think ZAR is too small to continue as a separate public company. Whether it'll be able to get fair/full value for its oil assets is debatable given that most juniors/mid caps are struggling with the volatility in oil prices and increases in operating costs. It had to cut its monthly dividend this year to $0.06/mth.

BNP...I've nibbled at this above $20...luckily got out before price tanked to mid teens. It's much larger than PLT or ZAR (i.e. 10x more production) mainly nat gas production with some nat gas liquids. You're betting on nat gas returning to more sustainable (i.e. >$5) prices. IIRC, BNP did a share issue recently to buy nat gas assets from Fairborne Energy...so there's a group of investors that believe it's worth $16.50/shr.

PLT is a different play -- there's a thread on the "new" US based oil/gas companies listed in Canada, you can do a search for that thread. Basically, you're getting a fairly big dividend (~20%) because a large portion is characterized as a "Return of Capital" -- meaning you're basically getting your money back. The market is betting on a dividend cut, so you might want to wait until they announce the cut before buying in.
The reason I am considering PLT is because I have read a bunch of analyst report saying that it is oversold and could go to 5.5/6. It is fallen quite a bit and could be a good entry point.
i am quite confused about BNP. TD report says they should be able to continue the dividends however it might dip close 16.5 as you said. Might not be the best time to buy this stock.
Deal Fanatic
User avatar
Dec 21, 2005
5279 posts
517 upvotes
Markham
Musabbir wrote: The reason I am considering PLT is because I have read a bunch of analyst report saying that it is oversold and could go to 5.5/6. It is fallen quite a bit and could be a good entry point.
i am quite confused about BNP. TD report says they should be able to continue the dividends however it might dip close 16.5 as you said. Might not be the best time to buy this stock.
As Mark has mentioned, these are not exactly blue chip energy giants like Suncor/Imperial Oil; BNP is part of the TSX Composite Index, so it's probably the "relatively" safest out of three you're considering.
If you're looking purely at dividend yield in the energy space (probably not the safest strategy, but everyone has different tolerance levels), you can also consider:

Longview (LNV.TO) ~9% yield
Eagle Energy Trust (EGL_u.TO) ~10.4%

Both are more weighted towards oil production.

Edit: PLT confirmed its October dividend: http://www.marketwire.com/press-release ... 714269.htm

But don't be surprised if they cut next month (probably announce at the same time as earnings release):
The Trust strives to maintain the stability of its distributions, which, over the longer term, will be a function of production levels, capital expenditures and commodity prices. The commodity prices realized for the Trust's production, particularly for natural gas liquids, have declined materially over the past 12 months. The Trust will continue to monitor commodity prices with a view to ensuring the long-term sustainability of its distribution.
:idea: :) :lol: :razz: :D

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)