DIVERSIFIED ENERGY COMPANY Q2 2021 Dividend Exchange Rate

[idpickering]

I think some here hold these so this should be of interest hereabouts.

Q2 2021 Dividend Exchange Rate

Diversified Energy Company PLC (LSE: DEC), the US based owner and operator of natural gas, natural gas liquids and oil wells and midstream assets, announced on 5 August 2021 a dividend in respect of the second quarter to 30 June 2021 of 4.00 cents per share ("Q2 2021 Dividend"). The Company will pay the Q2 2021 Dividend on 17 December 2021 to those shareholders on the register on 26 November 2021.

The Company announces that Shareholders who have elected to receive their dividends in GBP sterling will receive an equivalent payment of 2.99 pence per share, based on the 2 December 2021 exchange rate of GBP 0.74864=US $1.00.

https://www.investegate.co.uk/diversifi ... 00095956U/

Aslso posted on Company News here; viewtopic.php?p=463379#p463379

Ian.

[88V8]

I think some here hold these so this should be of interest hereabouts.

I hold these.
I have more in value than I do in BP.
Although that wasn't the case when I first bought BP

The yield is well into the Lunatic zone.

John Hemming, late of this parish, sometimes posts about them on ADVFN.
Occasionally they even receive attention on our own O&G board.
https://www.lemonfool.co.uk/viewtopic.php?f=16&t=24762&start=60

DEC is mainly a gas supplier, and there was an interesting post on LSE over the weekend about the gas supply/demand gap, quoting Goehring & Rozencwajg Between 2010 and 2015, the rest of the world consumed approximately 19 bcf/d and exhibited no growth. Between 2015 and 2020, demand grew 50%, going from 19 bcf/d to 29 bcf/d in only five years. Going forward, these trends will continue resulting in ever-stronger global LNG demand.
https://www.lse.co.uk/SharePrice.asp?shareprice=DEC&share=Diversified-En

In my opinion the high winter gas prices we have seen recently are not going to go away, and the puerile calls for disinvestment in primary O&G will only exacerbate the demand gap that underpins DEC's value.

DEC are heavily hedged, and their success depends as much on their hedging as it does on exploiting their physical assets. We've seen in our UK electricity intermediaries what happens when hedging is unsuccessful or absent, and DEC's continued dividend leans heavily on the acuity of their hedging policy.

I am adding in dribs & drabs sub-100p, but with a yield of 9.5% net of WHT, I do regard this as an embellishment to my HYP rather than a core holding.

V8

[Maylix]

but with a yield of 9.5% net of WHT, I do regard this as an embellishment to my HYP rather than a core holding.

hi 88V8,
Sorry, straight question, would you mind explaining what you mean by that? (I'm a newbie and trying to understand people's thinking around these things)
Thanks
May Lix

[88V8]

but with a yield of 9.5% net of WHT, I do regard this as an embellishment to my HYP rather than a core holding.

Sorry, straight question, would you mind explaining what you mean by that? (I'm a newbie and trying to understand people's thinking around these things)

The yield is very high.
It's reckoned by some - including me - that anything exceeding 150% of the FTSE100 is a potential red flag.
Currently the FTSE yields 3.5% https://dividenddata.co.uk/ftse-index-yield.py so any share yielding more than 5.25% carries with it a risk of a divi cut or a decline in the share price, or both.
The yield signals that the market does not believe the divi &/or share price is sustainable.

That doesn't entirely prevent me from investing in such shares, but I have quite a large pot so I can afford the occasional mishap. Even so, DEC's yield of 10%+ is so high that I wouldn't put too much into it.
Currently in £ terms, it's around 1% of our pot.
For something safer, I might go to 5%.

In our portfolio, I think of this type of share as an embellishment, as it were, a fancy hat compared to an overcoat.

V8

[moorfield]

The yield is very high.
It's reckoned by some - including me - that anything exceeding 150% of the FTSE100 is a potential red flag.

Yes the yield is too high for me. Although I bought some at the start of the year the price has since dipped and the yield has risen above my tolerance "ceiling" - 2*CTY yield - so I'm not going to chase it further for now, a lesson learnt from Carillion. (If I want to buy income above such yield ceiling I would prefer to use preference shares, RAVP for example, but I drift O/T...)

Incidentally, DEC is an example of why I think Stephen Bland's initial selection process is flawed, namely (my bold) :

Rank the FTSE100 or maybe the 350 shares by descending yield then work your way down, picking a share from each sector.

https://web.archive.org/web/20160609102 ... 050304.htm

I've suggested previously elsewhere (viewtopic.php?f=15&t=10780&p=127483&hilit=reverse#p127483), and we've discussed it before I think, to select shares starting from lowest (meaning >= FTSE100) to highest yield rather than highest to lowest yield. Or put another way, reversing the order in which one's hard-earned capital can be seduced and potentially misallocated by the likes of DEC.

The same notes played, in a different order. But what do I know.

[moorfield]

I've suggested previously elsewhere (viewtopic.php?f=15&t=10780&p=127483&hilit=reverse#p127483), and we've discussed it before I think, to select shares starting from lowest (meaning >= FTSE100) to highest yield rather than highest to lowest yield. Or put another way, reversing the order in which one's hard-earned capital can be seduced and potentially misallocated by the likes of DEC.

Edit: I forgot to add here as an illustration this order would select ULVR before DEC, rather than DEC before ULVR, into an HYP (and yes, ULVR is eligible just )

[Maylix]

but with a yield of 9.5% net of WHT, I do regard this as an embellishment to my HYP rather than a core holding.

Sorry, straight question, would you mind explaining what you mean by that? (I'm a newbie and trying to understand people's thinking around these things)

The yield is very high.
It's reckoned by some - including me - that anything exceeding 150% of the FTSE100 is a potential red flag.
Currently the FTSE yields 3.5% https://dividenddata.co.uk/ftse-index-yield.py so any share yielding more than 5.25% carries with it a risk of a divi cut or a decline in the share price, or both.
The yield signals that the market does not believe the divi &/or share price is sustainable.

That doesn't entirely prevent me from investing in such shares, but I have quite a large pot so I can afford the occasional mishap. Even so, DEC's yield of 10%+ is so high that I wouldn't put too much into it.
Currently in £ terms, it's around 1% of our pot.
For something safer, I might go to 5%.

In our portfolio, I think of this type of share as an embellishment, as it were, a fancy hat compared to an overcoat.

V8

Thanks for the explanation V8. Much appreciated.
May Lix