Whitecap resources stock12/20/2023 Looking at the data, we can see that Whitecap Resources has been paying a dividend for the past seven years. Not only is your income cut, but the value of your investment declines as well - nasty. One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. We update our data on Whitecap Resources every 24 hours, so you can always get our latest analysis of its financial health, here. With EBIT of 1.74 times its interest expense, Whitecap Resources's interest cover is starting to look a bit thin. We calculated its interest cover by measuring its earnings before interest and tax (EBIT), and dividing this by the company's net interest expense. Whitecap Resources has net debt of 1.53 times its EBITDA, which is generally an okay level of debt for most companies. ![]() Net debt to EBITDA measures total debt load relative to company earnings (lower = less debt), while net interest cover measures the ability to pay interest on the debt (higher = greater ability to pay interest costs). A rough way to check this is with these two simple ratios: a) net debt divided by EBITDA (earnings before interest, tax, depreciation and amortisation), and b) net interest cover. Story continues Is Whitecap Resources's Balance Sheet Risky?Īs Whitecap Resources has a meaningful amount of debt, we need to check its balance sheet to see if the company might have debt risks. Extraordinarily few companies are capable of persistently paying a dividend that is greater than their profits. If executives were to continue paying more in dividends than the company reported in profits, we'd view this as a warning sign. It's good to see that while Whitecap Resources's dividends were not covered by profits, at least they are affordable from a cash perspective. ![]() ![]() Whitecap Resources paid out a conservative 46% of its free cash flow as dividends last year. In addition to comparing dividends against profits, we should inspect whether the company generated enough cash to pay its dividend. A payout ratio above 100% is definitely an item of concern, unless there are some other circumstances that would justify it. Whitecap Resources paid out 652% of its profit as dividends, over the trailing twelve month period. Comparing dividend payments to a company's net profit after tax is a simple way of reality-checking whether a dividend is sustainable. If a company is paying more than it earns, the dividend might have to be cut. Teck Resources (TECK.B.TO), Hudbay Minerals (HBM.TO), Capstone Mining (CS.TO), Nutrien (NTR.TO), Lundin Mining Corp (LUN.TO), Ero Copper (ERO.TO) and Interfor Corp (IFP.TO) were among the other major losers.TSX:WCP Historical Dividend Yield, July 10th 2019 Payout ratiosĬompanies (usually) pay dividends out of their earnings. First Quantum Minerals (FM.TO) tanked more than 12%. The Materials Capped Index shed more than 5%. Whitecap Resources (WCP.TO), Enerplus Corp (ERF.TO), Vermilion Energy (VET.TO), Tourmaline Oil Corp (TOU.TO) and Cenovus Energy (CVE.TO) lost more than 8%. MEG Energy (MEG.TO), Baytex Energy (BTE.TO), Crescent Point Energy (CPG.TO), Arc Resources (ARX.TO) and Nuvista Energy (NVA.TO) lost 10 to 12.5%. The Energy Capped Index tanked nearly 7%. The S&P/TSX Composite Index ended with a loss of 286.92 points or 1.51% at 18,717.12, after hitting a low of 18,661.52. Consumer staples and utilities stocks had a good outing as well. Several stocks from the financial sector declined sharply, while healthcare and technology stocks posted strong gains. Materials shares fell as well on weak bullion prices. ![]() Energy stocks were under pressure as crude oil prices fell sharply on concerns about outlook for energy demand.
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