It had to happen, sooner or later…
I’ll review the year later on, but in order to break the monotony of the “usual” dividends posts and so here it goes, first woes to the Long Haul Portfolio strike!
A couple of weeks ago my position with Breitburn Energy Partners (BBEP), an MLP that I picked almost 1 year ago for its potential and excellent dividend yield (at that time it was sporting an hefty 8%), took a massive beating thanks to the decision to suspend the dividend payout.
I will not get too much into the details of this decision, I guess that I “had it coming”, as I decided to ignore all signs of a disaster that was about to strike, betting on the oil price recoveries, mostly. Well, I was wrong, and together with its hefty payout, share decline took also 85% of the initial value, meaning that I am left with 150 dollars (badly counted) on a 1000 dollars investment.
To be honest I am not too upset about it, I have been quite bold and stubborn on this stock, and I got what I deserve.
The real question is: What do I do of the remaining shares? I can sell the off and make nothing, or keep them there (the worst that it can happen is that I loose 150 dollars, in case they bankrupt).
On my rules I wrote that I would asses company position in order to evaluate what to do after a dividend cut or suspension, in this case the money in play is marginal and I am a bit puzzled.
I am eying BHP and OKE with suspicion now, as I believe that there could be some dividend cutting actions there too, BHP right now is one of my biggest holdings and on them I am a little bit more “worried”.
Anyhow there are also some positive news, Cincinnati Financials declared an extra cash dividend in December, and that comes as a great bonus! 🙂
How do you normally behave when a dividend is cut? Sell and take the loss or wait till something is recovered?