Dividend Cut: Pengrowth Energy Corp. (TSE: PGF)

Dividend Raises

On September 1st, Pengrowth Energy Corp announced they would cut their dividend by 50% from $0.2 per share to $0.1 per share.

I’d like nothing more than to dump my shares of PGF, as it’s been my worse investment, by far. I’ve lost roughly 55% of my investment in PGF and don’t even feel comfortable selling now, in hopes that the stock price could appreciate in the future and I could recoup some losses.

It was one of my smallest investments as I felt it was a risky business to enter in the first place, and it was one of the first four stocks I had purchased at the beginning of my investment career. I’ve learned a lot since then, and have gravitated towards safer, blue chip companies with proven track records.

This, combined with Goldcorps’ 60% dividend reduction have put a damper on my monthly dividend income.

There are a lot of energy companies which have been selling for less and less, delivering attractive valuations, especially with the recent market volatility. If I were to continue investing in energy, I’d definitely pick a more reputable stock with a greater track record. Following are some names which I have an interest in, but must do more investigating.

 

Dividend Beginner

A 22 year old Canadian dividend growth investor striving for early financial independence; building as many passive income streams as early as possible.
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  • Ciao DB,
    I am stuck with BBEP which is performing really badly for me, I guess it’s a good lesson to learn, I have now taken this investment as a “gamble” that did not go so well. Since they are still paying dividends I will keep them, but if they were to stop I’d have to seriously think what to do… I guess that oil will come back sooner or later, but hoping for a rebound is just wishful thinking, I guess…

    • Hi SF,

      Yeah, I’ve lost so much money in Pengrowth from such a small starting sum, it’s not a huge deal but it’s a lesson I’ve learned. While it was one of my first picks before I started DGI rather than just dividend investing, I now know to look at a positive dividend growth history before purchasing shares. At this point I’m just going to hold on and see what happens.

      Best of luck,
      DB

  • Sorry to hear that two of your holdings have taken a dividend cut. Sometimes its better to cut your losses and leave – but if the fundamentals are ok – then holding onto the shares might be warranted. It happened to my IMG.TO holding as well – when dividend was eliminated, but the fundamentals are solid – so, Im holding onto the shares.

    Best wishes
    R2R

    • Hi R2R,

      Thanks for the compassion. Goldcorp seems to be improving their business and I can see how cutting the dividend makes sense for them to go positive, though gold is having trouble just as energy is these days… Up and down from one fed statement to the next. Pengrowth I’m unsure of, but to recoup such a small amount on this investment isn’t worth it to me when there’s a decent potential for a future upside.

      Best regards,
      DB

  • Hi DB,

    Selling after a dividend cut might be the best idea here.
    You’ve learned your lesson and you should be glad you learned it cheaply.

    Investing in these type of companies feels like gambling to me.
    Unfortunately I have done the same, but I’m glad I’ve seen the bright light of DGI, as did you.

    The companies you’ve listed are quality companies.
    CVX is looking so good at the moment. Wish I had more capital to average down.

    To a better August!
    Best wishes, DfS

    • Hi DFS,

      I’m alright with holding onto these two companies for the time being. I may choose to sell once I reevaluate my holdings by the end of the year. CVX and XOM are looking great, it’s just too bad the exchange between CAD and USD is practically unbearable at this point.

  • DB. Take it as a learning experience bud. We’ve all been through it. I hope you learn from this. I think we just gotta stick with quality companies and don’t chase such high yields. Safety of the dividend is important and it’s nice to collect dividends from various companies from different sectors.
    Slow and Steady. What’s the rush? I had 2 dividend cuts from ESV and COS. I sold COS and will never look back. My ESV is down 60 % and i’m down about 9000 USD from an investment of 18k in ESV. I’m still holding on and will get the hell out of it in a couple of years. No big deal. You live you learn.

  • Why not focus on the “boring” solid long term dividend payers instead of MLPs, mREITs, BDCs, and the like. Stick with KO, PEP, MMM, EMR, ITW, KMB, CL, CLX, CAT, ABT, MCD, VFC, etc. Sure every stock goes up and down but these are much more stable and offer solid dividend growth relative to many of your current holdings.

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My publishings on dividendbeginner.com references an opinion and is for information or entertainment purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. I am not responsible for any decisions you make concerning finances, taxes, or investments. You must perform your own research and always take caution when extending capital.