{"id":68372,"date":"2015-02-20T05:09:08","date_gmt":"2015-02-20T10:09:08","guid":{"rendered":"http:\/\/countingpips.com\/?p=68372"},"modified":"2015-02-20T07:40:04","modified_gmt":"2015-02-20T12:40:04","slug":"dividend-cuts-coming-fast-and-furious-in-2015","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/02\/dividend-cuts-coming-fast-and-furious-in-2015\/","title":{"rendered":"Dividend Cuts Coming Fast and Furious in 2015"},"content":{"rendered":"
February 20, 2015<\/div>
\r\n<\/div><\/div>

By WallStreetDaily.com<\/span><\/a> \"Dividend<\/p>\n

By Alan Gula<\/a>, Chief Income Analyst <\/em><\/p>\n

We\u2019re less than two months into the year, yet there have already been at least 17 substantive dividend cuts or dividend suspensions for U.S.-listed stocks.<\/p>\n

Of course, many companies in the energy sector are being forced to employ minimalistic dividend policies.<\/p>\n

In particular, the challenging offshore drilling market continues to put pressure on rig owners. Earlier this week, Transocean<\/strong> (RIG<\/a>) slashed its dividend payout by 80%. This followed Diamond Offshore Drilling\u2019s<\/strong> (DO<\/a>) decision to entirely scrap its special dividend, which it had been paying every year since 2006.<\/p>\n

In 2014, these stocks were coveted for their high dividend yields. Unsurprisingly, though, investors who indiscriminately chased high yields (so-called \u201cyield hogs\u201d) are now being punished.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

But don\u2019t say you weren\u2019t warned\u2026<\/p>\n

My Dividend Death Watch<\/a> is quickly becoming the scene of a dividend massacre, with five of the 11 targeted companies now having cut their payouts.<\/p>\n\n\n\n
Editor\u2019s Note:<\/strong> While you should be avoiding the dividend payers below, we\u2019ve pinpointed another dividend stock with strong upside potential. What makes us so confident? Because once this force gets behind a small stock, it MUST rise. Click here for the full story<\/a>.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Vanguard Natural Resources<\/strong> (VNR<\/a>), an upstream master limited partnership (MLP), just cut its distribution by 44%. It was at the very top of my list of unsustainable distributions.<\/p>\n

The infrastructure MLPs on my list may take a bit longer to cut their distributions, but I do think they\u2019ll have to axe them before it\u2019s all said and done.<\/p>\n

Meanwhile, many MLPs that I haven\u2019t covered, such as Mid-Con Energy Partners LP<\/strong> (MCEP<\/a>), will continue cutting their distributions.<\/p>\n

But it\u2019s not solely oil and natural gas companies that are feeling the pain.<\/p>\n

Peabody Energy<\/strong> (BTU<\/a>), the largest coal producer in the United States, curtailed its dividend in a bid to save cash.<\/p>\n

Arch Coal <\/strong>(ACI<\/a>), a smaller coal player, decided to do away with its dividend altogether. I\u2019ve talked about how defaults are a virtual certainty in the coal industry, meaning many of the common stocks will go to zero \u2013 although a dividend cut is actually credit positive for Arch Coal\u2019s bonds<\/a>.<\/p>\n

Cliffs Natural Resources<\/strong> (CLF<\/a>), a natural resources producer with coal exposure, also decided to scrap its dividend in order to focus on reducing its net debt levels.<\/p>\n

Going forward, I expect dividend cuts, including those outside of the commodities complex, to become much more commonplace.<\/p>\n

For a preview of what\u2019s to come, consider that a pair of business development companies (BDCs), Fifth Street Finance<\/strong> (FSC<\/a>) and Medley Capital<\/strong> (MCC<\/a>), both recently cut their payouts. I warned about