k9narc
3 years ago
This may be a 10% up day.
Crescent Point Energy Corp. CPG-T +9.84%increase
raised its quarterly dividend as it increased its production guidance for next year.
The company says it will pay a quarterly dividend of 4.5 cents per share on April 1 to shareholders of record as of March 15, up from its fourth-quarter dividend of three cents.
In addition to increasing its dividend, Crescent Point also plans to spend up to $100 million on share repurchases over the following six months.
The moves came as the company said it expects production next year to be between 133,000 and 137,000 barrels of oil equivalent per day, up from its preliminary estimate for the year of 131,000 to 135,000 boepd.
Crescent Point’s capital budget for next year calls for spending between $825 million to $900 million, unchanged from its preliminary 2022 guidance.
Crescent Point chief executive Craig Bryksa says the company has established a disciplined budget for 2022 and expects to generate strong returns and significant excess cash flow for shareholders.
“As a result, we are accelerating our plans to return additional capital to shareholders in the form of another dividend increase and share repurchases,” Bryksa said in a statement.
“As we continue to strengthen our balance sheet, we expect to further increase our return of capital offering to shareholders in the context of our capital allocation framework.”
k9narc
3 years ago
Crescent Point Energy Corp. (CPG-T +2.31%increase
) sat flat after it reported a third-quarter profit of $77.5-million, up from $500,000 a year earlier, helped by higher energy prices and increased production.
The company says the profit amounted to 13 cents per diluted share for the quarter ended Sept. 30. Oil and gas sales totalled $826.7-million, up from $437.0-million a year ago.
On an adjusted basis, Crescent Point says its net earnings from operations were 24 cents per diluted share, up from 13 cents per diluted share in the same quarter last year.
The increase came as average daily production came in at 132,186 barrels of oil equivalent per day, up from 113,383 boe/d a year ago.
In an update to its outlook, Crescent Point says it expects production this year to average 132,000 to 134,000 boe/d, at the high end of its earlier guidance for between 130,000 and 134,000 boe/d. Capital spending is now expected to be about $625-million, at the top end of its earlier guidance for between $600- and $625-million.
In its preliminary guidance for 2022, the company says production is forecast to average between 131,000 and 135,000 boe/d with a budget of $825- to $900-million in development capital spending.
otterman
10 years ago
Is Crescent Point Energy’s dividend safe?
JOHN HEINZL - INVESTMENT REPORTER
The Globe and Mail
Published Friday, Dec. 05 2014, 4:58 PM EST
Last updated Friday, Dec. 05 2014, 5:52 PM EST
You mentioned Crescent Point in a recent column.
Since then, the stock has plunged along with oil prices and the shares now yield 10.3 per cent. Do you think the company will cut the dividend?
Whenever a yield gets that high, investors are right to ask about the dividend’s sustainability. However, according to analysts and fund managers I spoke to, Crescent Point is under no immediate pressure to cut its dividend.
The price of oil would have to fall to less than $55 (U.S.) a barrel – and stay there for six months or so – before the company would even consider a cut, said Bruce Campbell, president of Campbell, Lee & Ross Investment Management, which owns the shares. (Disclosure: I also own the stock personally.)
Given the supply and demand situation and the politics surrounding oil, he said the probability of oil staying at such a depressed level is very low. Longer term, “I think $75 to $85 makes sense. Producers can make money there,” he said. “As somebody once said, what’s the best cure for a low oil price? A low oil price, because demand will grow and supply will shrink.”
An analyst I spoke to gave much the same response. “We would have to see a much lower oil price before they would take a hatchet to that thing,” the analyst said of Crescent Point’s dividend. “We don’t foresee a cut any time in the near term.”
Another reason the dividend is not in jeopardy right now is that, before oil started plunging, Crescent Point locked in prices for some of its future production. As of Oct. 28, the company had hedged 60 per cent of its oil production for the remainder of 2014 and 37 per cent of its production for 2015 at an average price of more than $93 (Canadian) a barrel, with a smaller volume hedged in 2016.
Finally, if the company needs to conserve cash to preserve the dividend, it can always cut back on capital spending, Mr. Campbell said. It’s worth noting that Crescent Point has maintained the same 23-cent monthly dividend since 2008, and oil has had lots of ups and downs in that time. “We’re comfortable holding it. We’re not comfortable going all-in or doubling down or anything. If oil looks like it’s headed below $60 [U.S.] then I probably reserve the right to change my mind,” he said.
“But the panic is subsiding some, so I think the most likely thing is that oil bounces around between $65 and $69 for a while and that means probably stock prices go sideways, too.”
For its part, the company is also trying to soothe investors’ nerves. “This is a great investment opportunity for people to collect a pretty high yield on a low-risk company,” Crescent Point chief executive officer Scott Saxberg told Bloomberg. “Our hedging program keeps our cash flow strong and allows us to maintain our dividend, maintain our capital program and battle through this.”
Given the possibility that we may see interest rate increases in 2015 or 2016, are there any changes you would make in your investments?
Some interest-sensitive sectors will likely get hit if bond yields rise – pipelines, power producers, utilities and real estate investment trusts, for example. But trying to time the market by selling these stocks before they drop and buying them back before they rebound is a mug’s game. As an investor focused on the long term, I plan to hold on and collect the dividends, which should continue growing regardless of what happens with rates.
Keep in mind that we have seen bond yields rise several times in recent years, only to fall back.
That said, it’s always prudent to diversify by owning less interest-sensitive securities as well. For example, I own Procter & Gamble, Johnson & Johnson, McDonald’s, Coca-Cola and several exchange-traded funds that provide exposure to various sectors.
Rising rates can signal economic strength, so growth-oriented companies might even benefit in a rising rate environment.
By diversifying, you’ll be prepared no matter which direction rates go.
http://www.theglobeandmail.com/globe-investor/investor-education/is-crescent-points-dividend-safe/article21976058/
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