An al­ter­nate div­i­dend uni­verse

Alberta Venture - - The Briefing -

> In a re­search re­port, J.P. Mor­gan Cazen­ove an­a­lyst Fred Lu­cas sug­gested that the en­ergy sec­tor em­brace an earn­ings pay­out div­i­dend model in which it sets a per­cent­age tar­get over a pe­riod of time, in con­junc­tion with a mod­i­fied share buy­back pro­gram. He ar­gues that this al­ter­na­tive model would mean that, dur­ing price val­leys, they would re­turn less to the share­holder but be able to in­vest more for fu­ture growth. Cur­rent share buy­back pro­grams usu­ally cor­re­spond to oil prices and gen­er­ate poor re­turns. Lu­cas ad­vises against com­pa­nies sell­ing as­sets to main­tain div­i­dends.

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