matisse capital management

Eni S.p.A. (E) Board Proposes Lower Dividend

Cut from €1.30 to €1.00 per share.  Shareholders will vote on the 23.0% cut for 2009's final payment.  Eni operates in three areas: oil and gas discovery, electricity generation and petrochemicals.  It is Italy's largest industrial company, with the Italian government holding 30% of all shares.  Net profit for 2009 was down 50% from 2008 to €4.4 billion.  Eni had been on my watch list for some time because of its history of dividend payouts.  So what happened?

 

Canada's Stocks of the Decade

The best and the worst of the last 10 years, from the Globe and Mail.  Many of the top performers were energy, mining and technology companies.  Below are some of the best, with their appreciation over the last decade.  You can find the worst performers here.

    FNX.TO, FNX Mining Company, +4,182%

    HCG.TO, Home Capital Group, +1,942%

    SNC.TO, SNC Lavalin Group, +1,379%

    TRE.TO, Sino-Forest, +1,089%

    POT, Potash Corp. of Saskatchewan, +895%

    RIMM, Research in Motion Limited, +539%

Will Bank of Montreal (BMO) Cut its Dividend?

There had been predictions floating around the internet that BMO might have to cut its quarterly dividend, as reported here.  As someone who owns shares in Canadian banks, specifically Royal Bank of Canada (RY) and Toronto Dominion Bank (TD),I am always concerned about precedent setting dividend cuts.  And I have been watching both BMO and Bank of Nova Scotia (BNS) as possible buys.  But a dividend cut does not seem to be in the cards at BMO, at least not this quarter.  On Tuesday, the bank posted third quarter results that easily exceeded analyst expectations, and which indicate a degree of ongoing stability:

• Net earnings:  C$0.97 a share, versus C$0.98 Canadian cents a year earlier.
• Cash earnings:  C$0.98, down from C$1.00 the year before, but above the average analyst estimate of C$0.95 a share.
• Quarterly dividend:  maintained at C$0.70, the same as the last eight quarters
• Tier 1 Capital:  11.7%, up from 9.9% the year before.

Over the last year (above) shares have gone from $45 to $48, after hitting a low of $19.32 in March.  The most recent dividend cut by a Canadian bank was in 1992, when National Bank of Canada cut its quarterly dividend from C$0.20 to C$0.10 a share.  BMO has paid a dividend since 1829.

Canadian National (CNI) - Best Railroad for This Recession

Canadian National Railway (CNI) reported its second quarter results on July 21; earnings per share declined 6% from last year to $0.94 (US) and net income was down 11%.  Even so, CNI shares are up 4% since last week and up 12% since the beginning of the year, while the Dow is down about 12%.  Why is CNI so steadfast in this recession; aren't railroads sensitive to the economy?  One reason could be the just-announced buyback of 25 million shares.  But I believe there are many other important factors that make this stock a compelling long-term value play.

Brazil Has Decoupled

Many analysts are of the opinion that emerging financial markets around the world will not, or can not, decouple from US markets and the Dow.  However, I Brazil already has.  The evidence is clear: the Dow began 2008 at 13,261and is now at 11,346, a decrease of 14.4%.  The Bovespa, Brazil's stock index, began the year at 63,885 and is currently 64,321, an increase of 0.7% and a difference of 15.1% from the Dow. See the chart below, after the jump, comparing the Bovespa to the Dow and S&P.  And listed below are some Brazilian ADR's and their year to date performance.  The only sectors that are down seem to be airlines and financial, but their declines are far less than those of their US counterparts.

SID, Companhia Siderurgica Nacional, SA, +45.9%

TCN, Tele Norte Cel, +30.2%

TNE, Tele Norte Leste Participacoes, SA, +27.9%

SDA, Sadia, SA, +24.1%

PBR, Petroleo Brasileiro, +17.8%

Analysis Brief: Syngenta AG (SYT)

Recently, Forbes posted the following headline: “Food Crisis Spurs Calls for More Research.” The article raised questions about agricultural sustainability and food shortages around the world.  Because of these shortages, many countries are increasingly looking to agribusiness for ways to increasing productivity, so the long term prospects for this industry are bright.  In fact, Syngenta expects the global seeds industry to grow 60% in the next 10-12 years.

Canada's Dividend Aristocrats: The Dividend Growers

Standard & Poor’s now compiles a list of Canadian Dividend Aristocrats.  These are companies listed on the Toronto Stock Exchange that have a record of consistently increasing their dividend for each of the last seven years.  According to S&P: “Since 1956, dividends have notably contributed 30% of the total equity return of the S&P/TSX Composite index, while capital gains accounted for the remaining 70%.”  While S&P’s criterion is seven years, most of these companies have increased their payout for over 10 years.  With this in mind, what are the top dividend growers on S&P’s Canadian Aristocrats list over the last decade?

Analysis Brief: Companhia de Bebidas Das Americas (ABV)

Are the shares worth the price? No doubt you recognize many of the beer brands pictured to the left:  Bohemia, Labatt’s, Brahma, Stella Artois.  They are all products of AmBev (ABV), the world’s fifth largest brewer and the leader in Latin America.  In 2004, AmBev joined forces with Interbrew of Belgium, creating InBev, the world’s largest brewer, or brewing "cooperative."  I have considered buying ABV shares for some time and decided to do some research.

Petroleo Brasileiro (PBR): Another New Discovery

Petroloeo Brasileiro (PBR), may have made another large discovery.  The head of Brazil’s National Petroleum Agency has referred to “unofficial reports” of another offshore find (see the map, left) that could contain as much as 33 billion barrels of oil.  If true, this would be the world's third largest oil field.  PBR shares jumped 9% on the news and now trade at $121.  But are they worth the price?  Reserve replacement is critical for any oil company; below, PBR's reserves are compared to those of other companies, without the recent discoveries:

European Dividend Aristocrats: The Dividend Growers

If you are an income investor, you want to buy companies that are increasing their dividends.  Given the slowdown in the US economy and the trend toward globalization, you may want to diversify your portfolio with some European dividend payers.  You might be interested to know that S&P publishes a list of Dividend Aristocrats for Europe.  The list consists of "large cap, blue chips" that have increased their dividends every year for the last 10 years.  There are presently 31 companies on this list; however, some have grown their dividends at a much faster rate than others.   Here are the top European dividend growers using S&P's European Aristocrats as a starting point: