
TSE:WCP
Has done so well that it has almost drifted back up again to its usual long-term high in price to book terms. There has been virtually no growth in the balance sheet for some period of time. He would guess the dividend is what is driving the company. It could go a little bit further than here, maybe a couple of dollars.
(A Top Pick September 19/12. Up 66.28%.) Did a perfect job of commissioning the market for its conversion into a dividend company, put together a stable of assets that fit that and using the currency that the market gave them to make accretive acquisitions from Barrick. Could see this getting to $14.
He has a short list of Junior companies that have gone into paying dividends. If they stumble, the stock market really penalizes them. It seems this one has the assets to successfully pay the dividends. Lower decline rate and better efficiency in the wells. The only risk is that they are relatively new and have to execute on the drilling side. Over 5% dividend yield.
Have been getting their debt down to a very low level so they have access to capital. Bought out interest in a key property and now have 100%. Very low decline rates. Valuation is high but he has no problem with this because he knows that when they have capital efficiencies with lots of opportunities, they can grow giving more chances to pay a higher dividend. 5.5% dividend yield.
Not a name you have to worry about if interest rates go up. Not yield sensitive. Just boosted their dividend by 5% in October and the 5% dividend is very safe. Estimates effective payout ratio for 2014 at 106%, one of the lowest in the group. Just did a deal that looks accretive to their earnings by about 7%. Growing production well. One of the best names to be looking at in the oil patch for a higher risk investor.
In terms of the slow growth dividend model, he really likes what this company is doing right now. Have just increased their forecast over the next year or so. Well managed. Good mix of assets. Dividend is fairly secure.