UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev Thread | Next Thread
Author: lobodoug Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 454804  
Subject: SDT - my losing Safe Bet choice Date: 11/16/2012 7:14 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 7
As an aside to all the discussion about next years contest, I want to point out that my "safe bet" (which has utterly failed to be one) has lost 40% of its value. However, its dividend is holding up rather nicely, so that now at nearly 18% return, it is one of the top dividend performers available.

Why is is doing so bad? Several possible reasons to consider:

1) Proposed changes in taxation of dividends, which hurts any stock primarily owned for a high dividend.

2) It is a spin-off (and still partially owned by) Sand Ridge Energy. Sand Ridge is tainted by its CEO having been a former cohort of McClendon at Chesapeake, and thus is SDT is tainted too.

3) Moderate drop in oil and HUGE drop in natural gas prices has affected returns.

Note that this is a royalty trust company - it will not pay dividends in perpetuity. The wells will produce less over time. Actual dividends will depend upon this drop in production, as well as the price of the oil and gas produced, over the life of the wells.

With a current dividend rate near 18% I'd say it is worth a look. That rate is based on 4x its most recent dividend. That dividend is its lowest so far, but drops in dividends are not due to dropping production, but the huge drop in the price of natural gas and more moderate drop in oil. SDT does hedge, but there are limits to how far out one can effectively hedge.

Cheers,

Doug
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post Back To Top
Author: Hohum777 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 408755 of 454804
Subject: Re: SDT - my losing Safe Bet choice Date: 11/16/2012 11:48 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I don't know how to weigh them, but I think

1) Proposed changes in taxation of dividends, which hurts any stock primarily owned for a high dividend.

has to be a big one. I have seen all kinds of ideas just sell off since the election results,
and the subsequent "fiscal cliff" debate. Many high dividend paying ideas have had major
sell-offs in the last 10 days. I watched one holding, PIMCO Stockplus (PGP) just get ripped
apart midweek, but recover somewhat today. Not quite as severe, but here's another holding
Niska Gas Storage (NKA) over the past month, now recovering
http://finance.yahoo.com/q/bc?s=NKA&t=1m&l=on&z=...

Print the post Back To Top
Author: ukgold Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 408799 of 454804
Subject: Re: SDT - my losing Safe Bet choice Date: 11/17/2012 6:16 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
1) Proposed changes in taxation of dividends, which hurts any stock primarily owned for a high dividend.

only for those in the US

Alan
UKGOLD

Print the post Back To Top
Author: Hohum777 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 408802 of 454804
Subject: Re: SDT - my losing Safe Bet choice Date: 11/17/2012 6:35 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
only for those in the US

Alan
UKGOLD


Not necessarily. What is the dividend rate for a stock-owner based in one of the Scandanavian
countries e.g. Norway, Sweden, Denmark or Finland?

Print the post Back To Top
Author: tim443 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 408804 of 454804
Subject: Re: SDT - my losing Safe Bet choice Date: 11/17/2012 7:08 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
1) Proposed changes in taxation of dividends, which hurts any stock primarily owned for a high dividend.

...

only for those in the US

...

Not necessarily. What is the dividend rate for a stock-owner based in one of the Scandanavian
countries e.g. Norway, Sweden, Denmark or Finland?


Hohum

Norway, Sweden, Denmark and Finland are planning to raise taxes on dividends?

In truth shareholders and companies get hurt by the drop in share price while USians are selling their shares but of course those who then buy in get a higher rate (assuming the company isn't forced to cut).

Lets just say it is complicated.

I've come to the conclusion that the fiscal cliff is not going to happen as the group that can keep it from happening are bent over a barrel and would have the most to lose if it did happen...? }};-()

Of course it would not be the first time I got burned by politicians for thinking they would act logically and with self preservation in mind!!!

I bought a dividend payer on Thursday and may buy another one or two this coming week.


Tim

Print the post Back To Top
Author: PeterRabit Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 408828 of 454804
Subject: Re: SDT - my losing Safe Bet choice Date: 11/18/2012 12:31 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
lbd Note that this is a royalty trust company - it will not pay dividends in perpetuity. The wells will produce less over time. Actual dividends will depend upon this drop in production, as well as the price of the oil and gas produced, over the life of the wells.

I own some SD so I know a little about this company.

http://www.forbes.com/sites/dividendchannel/2012/11/15/sdts-...

Question: if new and better extraction methods are developed for the Mississippian area, would that tend to extend the dividend payment time?

Peter

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev Thread | Next Thread
Advertisement