Image: Kinder Morgan.
Signs that the job market in the U.S. remains on strong footing were enough to help the stock market close the week on a bullish note Friday. The November employment report's 211,000 job reading, combined with upward revisions to past months, helped send most stocks soaring, with major market benchmarks wiping out Thursday's losses with gains of around 2%. Not all stocks participated in the rally, however, and Kinder Morgan (KMI 3.40%), FuelCell Energy (FCEL -0.60%), and Big Lots (BIG 0.96%) were among the worst performers on the day.
Kinder Morgan fell 13% as the energy giant joined the growing chorus of players in the oil and natural gas industry reportedly contemplating reductions in their dividends. The stock has gotten hit hard throughout the week, and Kinder Morgan said in a release at midday that it expects distributable cash flow of between 6% and 10% above the current 2015 dividend level of $2 per share. Nevertheless, the company said that it would have to review the dividend policy in light of its desire to maintain an investment-grade bond rating with all three rating agencies.
Kinder Morgan said it would not issue new shares at current prices, bucking a trend that some of its peers have resorted to in order to build liquidity. With traders almost pricing in an imminent dividend cut with this week's plunge, long-term Kinder Morgan investors have to consider whether a short-term move to conserve capital might actually be beneficial to the company's future prospects once the current crisis in the oil and gas industry comes to an end.
FuelCell Energy plunged 18% after the maker of hydrogen fuel-cell-based power plants announced that it had completed a reverse split of its stock. The 1-for-12 reverse split was necessary because of FuelCell Energy's stock having fallen below the $1 per-share mark, which created the risk that the fuel-cell specialist's shares would be delisted from the Nasdaq Stock Exchange.
The Nasdaq had warned the company in August that it had six months to get its shares back above the $1 mark for a 10-day period in order to avoid delisting, but FuelCell apparently concluded that it needed to take the more aggressive step of the reverse split in order to comply prior to a February deadline. Despite hopes for a recovery, FuelCell will need its ongoing cost-containment measures to pay off in order to keep the stock from giving up further ground.
Finally, Big Lots fell 6% after the discount retailer reported its third-quarter financial results. The company reported an adjusted loss of $700,000 on revenue of $1.12 billion, representing sales growth of about 1% from the previous year.
In many ways, the retailer's report looked solid, with a narrower loss than Big Lots suffered this time last year, and positive comparable-store sales of 2.6% falling in the middle of its expected range. Even though the retailer gave fairly positive guidance for the remainder of the fiscal year, investors remain nervous that a highly competitive holiday season could make it difficult for discounters like Big Lots to keep up momentum from earlier in the year.
