Dividend Cut/Suspension #5 of 2020

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Hi everyone, I hope you all had a happy and safe Easter weekend. I originally didn’t have a post to share with you as I was going to take a couple days off from writing, however I received news this morning of another dividend cut to my portfolio.

This morning The Keg Royalties Income Fund (ticker: KEG.UN) announced a 69% cut to its monthly distribution. I was say I was expected it to be cut or suspended indefinitely, so this is an interesting move. Why did I think it would be cut or suspended? Back in March the company closed all 107 of its restaurants so with no income coming it I knew this news was a given.

The Keg was paying a monthly distribution of $0.0946 per unit, now beginning with April 30th’s payment the new distribution will be $0.035 per unit. The company in its news release said they are planning on paying the new rate for the next six months.

I currently have 307 shares and with this announcement my income is going to drop by $18.30 per month, if the new distribution is paid for the entire year than my income will decrease by $219.60.

My plan is to continue hanging onto the stock, I believe over time the stock should bounce back. Before the pandemic the restaurants were always packed it will be interesting to see if people come back once COVID-19 is defeated.

Thanks for reading!

Matthew

9 thoughts on “Dividend Cut/Suspension #5 of 2020

  1. It must hurt to have so many cuts. Maybe now is the time to start building a dividend portfolio with more stable companies like Canadian banks and utilities. These are expected to hold on much longer in difficult times.

    Liked by 1 person

    1. I like EMA at this point I feel like I might have too much exposure to Utilities and not sure adding another one is a good way to go. Sorry to hear about the cut you received, hoping you don’t receive anymore.

      Like

  2. Oh no, I’m sorry Mathew. That is a rough dividend cut right there. It is hard to figure out whether to cut your losses and move on or stick around for the recovery. I have yet to sell a company right after they cut their dividend. The only one I cut bait with was a REIT, ARCP (now VEREIT), after they cut their dividend and announced fraud by management. Without the latter, I may not have sold.

    Bert

    Liked by 1 person

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