RBS sale delays hit credibility more than finances

April 29, 2016

The part-state owned UK bank says it may miss an EU-mandated timeframe to dispose of 300 branches. Even if it takes another 12 months, RBS’s capital position should be OK. But for investors to believe the path to dividend reinstatement, it needs to avoid any missteps.

BHP admits dividend pledges and mining don’t mix

February 23, 2016

The world’s largest miner slashed its interim dividend 74 pct and followed rival Rio in scrapping a “progressive” policy. About time. Promising payouts will only ever go up is daft in such a cyclical sector. Consistency matters less than safeguarding the balance sheet.

HSBC shares weighed down by fear of future

February 22, 2016

The global bank hiked its dividend even as 2015 pre-tax profit fell 7 pct. HSBC thinks it can raise returns even as its balance sheet shrinks. But investors remain worried about negative rates, cheap oil and China’s slowdown. An 8 percent yield shows they can’t both be right.

Stress test implies end to UK bank capital hikes

December 1, 2015

No institution failed the Bank of England’s 2015 exam, though RBS and StanChart missed on some metrics. The regulator also thinks capital ratios are only a little short of what’s needed in the longer term. That implies some lenders can pay higher dividends from their earnings.

BHP’s Brazil disaster points to dividend cut

November 30, 2015

The Anglo-Australian miner needs to conserve cash to pay for the Samarco dam disaster in Brazil. Forecast earnings already fall short of the $6.5 billion it paid shareholders last year. BHP would be wise to get ahead of the curve and scrap its commitment to progressive payouts.

Scrip dividends are a fool’s gold

October 23, 2015

Europe’s oil majors paid out more than $30 bln in dividends last year. Some will now offer a share option in lieu of cash and some investors like scrip dividends, but they loosen a key discipline on management. They also suggest companies cannot afford cash dividends.

BP and Total find downstream respite

April 28, 2015

Strong results in refining and marketing limited the profit fall at the two European majors. With the oil price down, the gains are especially welcome. But downstream overcapacity will bite in the medium term, while upstream businesses remain hostage to the oil market.

Why buybacks should be banned

September 16, 2014

Some share repurchases get Warren Buffett’s seal of approval. But the great investor is on the wrong track. Buybacks are really dividends by another name. The price doesn’t matter. Besides, the practice is unfair to some shareholders and to governments. The world would be better without them.

Missing at the New York Times – a dividend?

December 22, 2011

The Gray Lady has regrouped since flirting with oblivion three years ago. After purging non-core assets, cutting debt and parting ways with its CEO, the Times looks ready for a deeper digital dive. Before it can take that plunge, the firm may need to pay its controlling family.

Corporate America fears taxes more than recession

November 29, 2012

Hence the flurry of special dividends. If the “fiscal cliff” of tax hikes and spending cuts really risks a downturn, companies ought to hoard cash. Instead Costco and others are giving it to shareholders while tax rates are low. That’s fine, but suggests the hype is overdone.