Home » Black Swans » Encana Crash and Borrow Dividend Burn $ECA Integrity When You Borrow. Yeah Right!

Encana Crash and Borrow Dividend Burn $ECA Integrity When You Borrow. Yeah Right!

Encana

Encana (Photo credit: Wikipedia)

Encana (NYSE:ECA) what’s to think about. Big gas play with about a 4.5% dividend for a pay to wait. If you believe in heating your home your onside right. Well its like this. Price of gas is declining big time. That means cash flow is hurtin but the overheads still need tending.

The shareholder is expecting a dividend on account of some smooth talk from the executive suite. But here it the thing. To pay the dividend; Encana is borrowing big time. That means the vig is turned  on and climbing. So do something to get the monkey off your back.

The suits borrowed and promised something sweet and juicy for tomorrow. Probably your foreskin but maybe something else. One thing is for sure. They have borrowed to keep the dividend going. Always a suspect move need a certain Je né se quoi non.

So are you feeling lucky or is the French sounding good?

So you have a dividend yield and growing bank loans. Bust a move. The bank loans are problems.

George Gutowski writes from a caveat emptor perspective.

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