Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: CusterInvestor who wrote (56417)	12/17/2015 2:13:00 PM
From: CusterInvestor	Respond to of 78702

Sorry for the article link-I just realized it was a piece of worthless dribble.

To: CusterInvestor who wrote (56417)	12/17/2015 2:46:02 PM
From: E_K_S	1 Recommendation Recommended By gcrispin Respond to of 78702

Custer- Re: SE - I saw same article. On the 2nd page they state: High debt and an inability to fund the dividend and growth make Spectra Energy Corp. (NYSE:SE) a prime candidate for a dividend cut if oil and gas prices continue to stay low. I went to their Q3 presentation (11/04) and if you download their presentation, on page 5 it shows SE's 2015 distributable cash flow at 1.4x (higher than the MLP SEP at 1.3x). Full year coverage (when they add Q4 results) expected to be 1.2x and 1.1x respectively. It is true they have high debt EBITA/LT Debt is 5.46x (this is better when below 4x), but the company has shown that it can grow their DCF. -------------------------------------------------------------- All of these pipeline companies are cumming under scrutiny as far as their debt load. The best way to check is to look at what their Bond dept is rated and where it trades vs PAR. I looks like their bonds are rated Baa2 and BBB and the few issues I scanned were trading above PAR. So debt is not distressed. I have two small Buys in SE last 30 days after selling out of my position late last year. My avg price is $25.40/share w/ my last buy 12/7 at $22.71/share. This one is one of the better acting pipeline companies. I have not added anything else in the sector other than CNP (they own 50% on ENBL) and are the GP. I would stay w/ the General Partners and double check their debt rating and error on those that are rated higher to be safe. It's easy to generalize on 'ability to cover dividend' so it's important to dig a little deeper. Also, like Buffet, stay w/ companies that are in FERC regulated industries as they have pricing power. CNP & SE both have some subsidiaries that operate in the FERC regulated businesses. That also helps provides a layer of safety. Good luck and if you find something attractive, good assets, quality dividend payer and not too much debt, please post your ideas. EKS