It was bound to happen. Dividend slashing season is upon us.
We’ve been preparing ourselves for this for the past month or so now, ever since it became apparent that the Coronavirus was not something we were going to simply talk out of existence.
For the time being we’ve now received 2 cuts, and to be honest we’re actually kind of surprised that these were the first two to take the plunge.
NFI Group – Dividend Cut # 1
NFI Group announced earlier this month that they we’re making a 50% cut to their dividend. For those of you unfamiliar with NFI Group, they are manufacturers of buses and coaches as well as service and parts providers. They had recently become members of the Canadian dividend aristocrats list as they’d raised their dividend every year for over 5 years but sadly, this status will be short lived.
This cut will cost us about $78.00 in forward yearly dividend income.
Inter Pipeline – Dividend Cut #2
Inter Pipeline announced this morning that they too were going to be reducing their payout to shareholders, a move which will save them an estimated $525 Million this year. This move will reflect a 72% cut to their dividend which will definitely hurt our portfolios income stream.
This cut will cost us about $390.00 in forward yearly dividend income.
What will we do?
The bad news is the dividend cuts.
The good news is these are still leaders in their respective industries that we 100% believe in for the long term. May we have to wait a little while? Sure. But we believe that long term the pay off will be worth it. Once this virus is behind us and the dust has settled these are two great companies who have proven to be devoted to paying their shareholders a healthy portion of their earnings and we look forward to picking up where things left off, even if its not for a few years from now.
So simply put, will we sell? Absolutely not.
Do we have any fellow NFI Group or IPL shareholders reading along with us? If so let us know below or over on Instagram @FindependenceCanada what you intend to do with your shares?
Thanks for stopping by,
FIC.