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Yeah Wood also have an AGM statement dues on the 7th May. I still think these two will keep the 2019 final dividends then cut/stop 2020 interims when they provide their 6 monthly trading updates. By then they should possibly be clearer on the potential impacts of oil price and Coronavirus but who knows!
Well, Petrofac have their final dividend payment proposal on their forthcoming AGM, so their shareholders will be voting on it at their AGM , so they are clearly feeling able to go ahead with it..
so.... .#never_say_never
" but do you believe Wood will pay the diviudend due in May (final for 2019)? "
I think the odds are stacked against it, myself.... I cant see any company laying off workers to claim Government wage ssistance in one hand and handing out dividends from the other as I suggested.... It just doesnt seem the right thing to do
You also have to consider the company credit rating, which may or may not get revised due to the circumstances (they wont be alone on thata spect ) which might effect their debt repayments for the year ahead....
Just so much right now that screams " caution" .... IMO
Pokerchips
Very well summarised. and I tend to agree companies going forward will take a very cautious view on dividends but do you believe Wood will pay the diviudend due in May (final for 2019)?
You can look at paying dividends right now as being reckless (for any company), given the enormity of the crisis .... and the need to prioritise the need to maintain balance sheet strength, look after employees, reduce debt and be mindful of any setbacks in the start of new contracts and delays with current work, non payment of money owed etc etc etc
Generally speaking the market may well look favourably to dividend suspension during these very difficult times and the need to look at the situation later in the year once the worst of the current situation has passed.....
No good a goose laying a golden egg on month and then getting sick and never being able to lay any eggs in the future...so to speak ...
Personally I would hang on to the dividend cash and re look at the situation for paying it ...say...as a special dividend ..or whatever ..further down the line...if that ever becomes a possibility...
I think companies are also having to be very mindful of receiving Government support to pay furloughed employees wages in one hand and then paying a dividnd out from the other
WG currently has a potential greater upside and lower downside than most FTSE 100 shares.
Table below has historic share price statistics since 31Dec2018
Wood Group on the left_________Royal Dutch Shell on the right
‘
WG._______Price__The % Chng____RDSB_______Price____The % Chng
Maximum___598.60__258.6%_______Broker_____2,680.00___117.8%
Broker_____586.00__251.0%_______Maximum___2,620.00___112.9%
Top 5%____553.70__231.7%_______Top 5%______2,591.38___110.6%
Q3________512.40__206.9%_______Q3__________2,458.88____99.8%
Median____412.35__147.0%_______Median______2,334.50____89.7%
Q1________373.15__123.5%_______Q1_________2,251.63_____83.0%
Bottom 5%_321.10___92.3%_______Bottom 5%__1,646.60_____33.8%
Current____166.95____0.0%_______Current_____1,230.60______0.0%
Minimum__135.45__(18.9%)_______Minimum______916.80____(25.5%)
.
Not perfectly compatible but roughly similar companies. In this illustration Wood Group wins as it does against many others.
DYOR ____ I think the isolation is getting through to me
but ..... presentation of full year results did say no allowances had been made for any potential Coronavirus impact and oil has continued to fall since then.
I agree dependancy on oil and gas is a lot lower than it was about 5 years ago but its still there and I also agree any cut will severly dent investor confidence.
Virus started early this years and this Oil Crisis started in late February so both were known knowns when the FY report was published. There are US$7bn dollars of orders on the books for this year and few, if any, are in industries which are under threat except the 35% in the Oil business. The Company wishes to rebuild its investor base. A PANIC cutting of its dividend this early would destroy the confidence it wishes to build. IMHO:- A keep "calm and carry on" attitude would help restore the badly damaged share price.
SailorBeware
I doubt they considered the double blow from Coronavirus and oil price when they wrote this only a few short weeks ago. I’m still not sure shareholders will approve the the final dividend payable in May from 2019 performance at the AGM.
Wood remains committed to its progressive dividend policy which takes into account future cashflows and earnings. This is a key foundation of the Wood investment case which has been sustained through the challenging conditions in our core markets over the last few years.
Source :-March 10 2020 Final results extract
I agree Pokerchips. Cash in the bank means everything at the moment. No one will be extending debt and if anyone does it will be on awful terms so WG. are in a strong position for the rebound. As you say oil is bottoming out so you'd expect the closing of shorts to give it an extra spur.
Another beautiful day
Getting a dividend in the form of buying the shares cheap and oversold and seeing a capital gain is probably the way the market is going, rather than hoping the dividends continue in these uncertain times
At least Wood can keep their debtors happy by pushing their sale of asset cash their way, thus reducing the likelihood the debtors will be the ones demanding any dividend cut.
The shorters have been slowly reducing, on the lows.....and..something has to happen with the oil supply
With US shale Wood is working with companies within the Permium belt, who are the ones most likely to survive , should some of the shale companies fold and go under.
There has been chatter about the US joining with Saudi Arabia to create an Opec+ , but that is very early days if that were ever to happen, and somewhat speculative
Overall I think there are quite a few derivative oil short contracts being closed which has been giving the oil price a bit of an uptick.....there must be those who dont actually believe the pumping of supply will in fact continue come April
Thanks for the info Aucuba. Much appreciated
TopCatz
As far as I canm see 17 years of continuous dividend growth from Wood. 10 year dividend growth lies over 13%. They have also siginificantly reduced their exposure to the oil and gas market over the last few years since the AFW acquisition.
That's a dividend yield of >13% from these prices. Very nice, although I appreciate it will be marked down on ex divi date. Hopefully a run beforehand. Did the skip or reduce the divi's during the financial crash Aucuba because oil was trading at similar levels then and would have had a similar knock on effect against the sector.
I think the final dividend of 23.9c will be paid. It’s for 2019 performance but I agree the interim dividend payable later in the year is really at risk.
Thanks Pokerchips.
They have a lot of cash reserves so they may well pay. Good divi yield at these lowly prices and even better with the dollar so strong.
Regards
Proposed final dividend of 23.9c,which has to go to the AGM vote on May 7th....so by then things may be better
I think the ex div day is 16th April and the payment date is scheduled fo 15th May , from what I saw on Hargreaves Landsdown....but I am not 100% sure on that
Hi Pokerchips - Yeah, there won't be many divi's around this year. When is the ex-divi date out of interest ?
I bought in yesterday with the notion that the oil price would improve as China gets back to work and any US stimulus would help boost the cost control damage during any close down period.
The Nuclear sale cash will help at just the right time.
I am sceptical about any dividend payment, given that almost everyone is cancelling them at the moment and as such, it isnt difficult to do the same ....given the current circumstances
Bearishbull
Thanks for that. I'm certainly keeping the faith!. The share price is obviously a concern for me at the moment but its the dividend I am in this for and although they have a nice payout coming in May I am worried about it going forward.
£1,847.00 million in cash at bank
M.Cap £948 Million
685mil shares = 138.39 so this price just reflects the cash we hold and nothing else, therefore we are way undervalued, as lots of companies in this worring time. Keep the faith in 3 mths we will all be happier. stay stong and keep healthy.