Alas! another dividend cut.

[kathiel]

Friday morning, I discovered that PPL cut their dividend by 60%.  This is a utility I had heard for many years.  I sold it all Friday morning, and started buying more of some stocks I held that paid 5% or more - one of my favorites, MPW.  I still have some cash left and will buy some more well-paying stocks on Tuesday.  

[Deleted]

I've not had any issues with cuts for quite awhile. I would be interested to know if there were any signs with this one - poor management, over-leveraged, declining revenues/increasing expenses, payout ratio, litigation/regulatory issues (like pg&e and the fires) that could have been an indicator? 3M I am watching more closely due to litigation risk. Definitely learned after KMI you can't rely on management rhetoric. APU - payout became unsustainable. T had bad management, over-leveraged. OXY - expansion at expense of dividend. GE - bad management decisions. All of these were somewhat communicated. Waiting has never given me a good outcome. Translates to non-dividend payers too.

[kathiel]

There were rumors - PPL agreed to sell some UK holdings to National Grid, and agreed to buy power plants in Rhode Island. So the cut really has to do with reorganization. There are also rumors that the cut will be restored once they acquire and integrate the smaller power companies. I just don't want to wait and see. In my experience, there are often rumors abut dividend cuts that never pan out. I suppose if I had been really worried about a cut, I could have just sold when I heard the rumors. But I knew I could cope with a cut.

I hold about 25-30 dividend paying stocks in two separate IRAs, a TIRA and a ROTH.

[bb2]

To the OP, RE MPW.    Notice in the ast 5 days MPW is down 5%. I sold all my MPW 5 days ago because of this in the WSJ:

"How a Small Alabama Company Fueled Private Equity’s Push Into Hospitals"
"Buying binge made Medical Properties Trust one of the biggest owners of U.S. hospitals; but its largest tenant piled up $800 million in losses"
www.wsj.com/articles/hospitals-private-equity-reit-mpt-steward-11644849598

And there was this:

"Medical Properties Trust helps private-equity firms profit from hospital deals, but it is heavily exposed to financial issues at Steward Health Care"
www.wsj.com/articles/pe-backed-hospital-chain-got-help-from-major-landlord-as-losses-mounted-11624014000

I just didn't want to be involved in private equity hospital ownership. Congress is looking into this stuff.
And there's the 3 gulfstreams and the blah, blah.

I'm not suggesting this is a sell - it just was for me.  Too much hair on this thing.

[kathiel]

bb2, I was aware of that., but I felt like the better indicator of how MPW is doing is that they just raised their dividend by .01 per share per quarter.

[bb2]

I subscribe to the Brad Thomas letter and he has had a buy on MPW for a long while. I've been watching for any recent comment from him on MPW but so far nothing.
I tend to overreact to these news items but sometimes I just don't want the risk of a business that doesn't quite make sense to me - like this private equity situation. Kind of like tobacco for me.

If you like healthcare REITs and high yields, you might look at NHI. Thomas has a strong buy on it in his last letter; a buy below $68.00. 6.6% or so right now at $54.50/sh.
He's got a speculative strong buy on Sabra, SBRA. 8.8% yield.

[alvinthechipmunk]

This thread once again shows me the value of being here. I could spend all day, investigating ideas. But I have to tear myself away.   kathiel ,steelpony10 ,@slooow ,bb2 ,