Q: With Nat Gas around $1.70, I'm wondering about the sustainability PEY's dividend? The stock seems to be holding up relatively well so I'm wondering if this is a opportunity to add to my position.
5i Research Answer:
PEY does have some gas hedges in place, which help maintain its cash flow. BUT...its nine-month 2023 payout ratio was 101%. Its balance sheet is OK, but there is some debt. At a 10.2% yield investors are exhibiting some concern on the dividend, and we cannot call it completely safe at this time. The stock is very cheap and doing OK (relatively) but we would be OK waiting here.