Is Enerplus’s Dividend Safe?

Enerplus made a drastic, yet necessary move in June, when the company chopped its dividend in half. Although shareholders never want to see high-paying dividends decreased, Enerplus needed to take a hardline to increase the company’s unappealing liquidity picture. However, even after reducing its dividend, the company still faces significant headwinds going forward, including operating in highly capital intensive plays, and a looming $400 million debt hurdle before 2015.

Although management still has to navigate through troubled waters, Enerplus has a few options at its disposal. The first is 12 mature waterflood assets, which provide solid and stable cash flows that have a 50% rate of return to go with its growth assets in the Bakken and Marcellus shale. In addition, Enerplus has valuable leaseholds in the Montney and Duvernay in Canada, which the company is currently shopping. Check out the video below for detailed information on Enerplus, and see if the company can maintain its 7% dividend, or if it will have to chisel it away, once again. 

Another huge lift for Enerplus has been the steady increase in crude oil prices since the first quarter of this year. Oil E&Ps are closely aligned with the price of crude, but some companies are more levered than others. If you're on the lookout for some currently intriguing energy plays, check out The Motley Fool's 3 Stocks for $100 Oil. You can get free access to this special report by clicking here.

Joel South has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2035126, ~/Articles/ArticleHandler.aspx, 10/22/2016 2:00:29 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 16 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
CLR $52.85 Down -0.13 -0.25%
Continental Resour… CAPS Rating: **
EOG $93.88 Down -1.03 -1.09%
EOG Resources CAPS Rating: ****
ERF $7.54 Up +0.10 +1.34%
Enerplus Resources… CAPS Rating: ****
PGH $1.71 Down -0.02 -1.16%
Pengrowth Energy T… CAPS Rating: ****
SU $29.42 Up +0.07 +0.24%
Suncor Energy CAPS Rating: ***