![]() ![]() What's notable here is that Pioneer tied its dividend to its financial performance. ![]() As a producer of oil and natural gas, the company's top and bottom lines can vary dramatically from year to year and even quarter to quarter. ![]() Pioneer Natural Resources (NYSE: PXD) operates in the highly cyclical energy sector. Otherwise, you might end up shocked by a sudden dividend "pause." Some dividends aren't meant to last But you need to make sure the opportunity for a business turnaround is strong and track company performance closely to make sure the expected progress is being made. But if management can't execute better, the dividend could be gone for a long time.īuying stocks when they are out of favor is often a great time to find high yields. The company has positioned the dividend as being on pause, which suggests it will come back at some point. The company's turnaround plan took precedence over the dividend, which makes sense.īut what really sealed the deal was the fact that management wasn't capable of living up to its own expectations. Guidance was weak at the start of 2023 and was further reduced in the first and second quarters. The problem is that the retail environment the company faced continued to get worse and worse. The big change came when it spun off Kontoor Brands into own its basics business. The big takeaway here is that VF reinvented its business, shifting away from its historical approach of having a reliable and boring core, layering on more growth-oriented businesses. (NYSE: VFC), which worked out well for me because the high yield it offered when I started looking at it just didn't last. I never ended up buying clothing maker VF Corp. A changing business can change the dividend If you are looking at a stock with a high yield, make sure leverage isn't a risk. The big takeaway for me was that leverage is a business killer. It would be hard to describe this as a failure, but it certainly wasn't a success. I had owned my BDC investments for around a decade or so, and the dividends I collected offset the capital loss I experienced. Dividends got cut, companies went out of business, and Allied Capital ended up selling itself on the cheap to another company. And then a deep recession hit, and the leverage inherent in the BDC business model suddenly mattered a great deal. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |