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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (9862)	8/15/2011 8:42:40 PM
From: Tapcon	Respond to of 34328

Hi EKS, Thanks very much for the feedback and the link to the explanatory article. I was aware that REITs had to pay out 90% of their earnings to avoid taxation. But I was not up to speed on the specific adjustments to come up with AFFO. I had looked to see how much of ERF's distribution was return of capital and it looked to be a fairly small proportion of the total payout. I believe ERF was one of those CANROYs that converted to a different corporate structure after Canada announced a change in the CANROY tax rates in 2007 -- (tax change is effective Jan 1, 2011, which is why many CANROYs have converted by now. ) I've shied away from MLPs due to the Schedule K tax hassles and the $1000 distribution limit in retirement accounts, though I noticed there was quite a bit of discussion about them over on the value thread during the past couple of years and they've been a good investment. Anyway, it looks like the challenge is to see whether apparently unattractive AFFO payout ratios are a one-time event or whether the company had some unusually large capital outlays or other events. Thanks again for taking the time to respond.

To: E_K_S who wrote (9862)	3/13/2012 11:39:40 AM
From: Bocor	Read Replies (1) \| Respond to of 34328

Question for you on ERF since you seem to have a lot of knowledge on the company. I have been looking at it since January, but have not yet pulled the trigger. I am making room in my IRA so I can avoid the tax bite. My questions relate to why ERF has used so many of its assets on new gas acquisitions when there is and will be a market glut of natural gas for all the foreseeable future. It seems to have even diluted its stock equity recently for this purpose. Are they just looking at the long term picture? Buying straw hats in the winter?? It's earnings seem flat with little improvement in sight. It's costs, especially drilling and administrative costs are fairly high, no? Any idea whether they can maintain the dividend? From Q4 results: (Our adjusted payout ratio, which calculates dividends plus capital spending divided by funds flow, was 221% for 2011. However, after including our net acquisition and disposition activity, our adjusted payout ratio was 153%. Our payout ratio has increased year-over-year as a result of our significant investment in early stage growth assets that are not generating immediate production or cash flow. This has been compounded due to the decline in natural gas prices.) Will the dividend be partially funded from proceeds from the recently issued shares to Canadian investors?