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
Ouch!
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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.
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Yes it does hurt. I do own three Canadian banks (RY, BMO and BNS) I also own four utilities companies (FTS, CU, AQN and BEP)
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That’s good. Why not EMA as well, great dividend. But you have a good foundation to build on. Keep it up.
I’ve had one cut but could have a couple more. Dividends are my income now in retirement.
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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.
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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
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Hi Bert thanks it is a tough loss to take. At the moment I am holding onto the stocks that have cut the dividend. I think they will bounce back after the pandemic.
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Dang..they just keep coming 😦
Hopefully most or all of them get reinstated to previous levels as soon as there is a quarter or two of stable revenue again.
Good thing is – you are still super young, lots of time to make it up!
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Thanks Jordan I’m hoping the dividends will go back up after the pandemic. Also hoping this is my last cut.
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