Update - I took some time to update the post with fresh charts as the links were broken and it’s one of the most popular post. It was originally written on June 10, 2010. I still own Crescent Point Energy (TSE:CPG) and in fact I have doubled my position in CPG this last month. I have made some updates to the yields below to reflect today’s prices and dividends.
Daylight Energy is a company I have been tracking and hearing about for a while now. This past May, they converted from an income trust to a corporation and have kept a monthly dividend distribution. Their conversion to a corporation removes the unknowns for investors around dividends moving forward assuming they can maintain the current distribution.
Fact Sheet
Operating in the oil and gas field with a 50/50 ratio. Originally more of a gas player but has since even out its exposure.
6% 5.77% yield (as of October 20, 2010) from monthly dividends.
Conservative payout ratio after conversion.
Market value at 2B$. Relatively a small player.
1 Year Chart with the TSE S&P composite index.
Competitors
Crescent Point Energy (CPG) is an 8B$ company with a recent conversion to a corporation as well. Current yield is at 7% 6.86% (as of October 20, 2010) through monthly distribution.
ARC Energy Trust (AET.UN) is an 4.77B$ income trust with plans to convert to a corporation on January 1, 2011. Its current yield is 5.40% 5.66% (as of October 20, 2010).
Pengrowth Energy Trust is a 2.87B$ income trust paying 8.5% 7.19% (as of October 20, 2010) in distribution.
Enerplus Resources Fund is a 4.22B$ income trust with a yield of 9.29% 7.91% (as of October 20, 2010).
There are other small players but the ones above are the major and most popular investments.
Here is a comparative chard between Daylight Energy Ltd and its competitors. Daylight has actually performed the worst since converting to a corporation in May. ERF.UN and PGF.UN should be looked at in more details before committing to DAY.
Thoughts
At 6% 5.77% yield (as of October 20, 2010), DAY is in my list of high paying dividends. I do not own it but I own a competitor (CPG). It is going through a number of changes and is a relatively small player getting momentum. I am not sure it would be a buy and forget through DRIP at the moment and as such I have some reservations.
Readers: What do you think?
Disclosure: No position in DAY at the time of writing
Disclamer: Please note that this blog post represents my opinion and not an advice/recommendation. I am not a financial adviser, I am not qualified to give financial advice. Before you buy any stocks/funds consult with a qualified financial planner. Make your decision at your own risk – see my full disclaimer for more details.
Sign Up for my FREE Money Tips Newsletter!
You don't want to miss my monthly topic, my readers' questions and answers and my dividend portfolio comments.
7 comments to Dividend Yield: Daylight Energy Ltd. (TSE:DAY)
… growth thru acquisition strategy … dividend relatively safe (cut during conversion) … currently raising cash via non-core asset sales (complete by year end) … good balance of oil + natty …buy below 10, strong buy below 8.40 … currently trading above 50dayMA (9.02), breaking above resistance (9.40), reverting to mean toward 200dayMA (10.02) … is hitting 9.70+ as i type on good volume (1.2m)… "may" trade off mid-sept thru late-oct/early-nov late with the broad markets as a "risk-off" macro political + economic event sell-off "may" play out … although judging by recent move up, some are not waiting … pays a nickel a month divie, attractively while you wait for better days ahead … my target range 11.80 – 12.40 … could also be taken out … holding at 5700 units via High Pine acquisition in summer 2009 … will try to grow this into 100 lots before Nov, market willing … watch asset sale outcome(s) thru year-end …
@101 Centavos I have always been interested in Daylight except for the variable dividend (cash distribution) as an income trust. It would look like that it has settle on the 5 cents per month for a 5.70% yield. I would nee to look at it again before making an entry point. I have been heavy in CPG at the moment with too much exposure to oil & gas producers.
It used to be an Income Trust and paid Distribution which can be dividend or a return of capital. That’s why income trust accounting is more work as it impacts your ACB (Adjusted cost base) with all your distribution. That sais, a negative earnings for a short time can probably be sustained but not for too long. They would need to adjust their dividend. A good thing that you can do is contact their investor relations and asked. There could always be a one time expense that brings the earnings down, you would have to look at the annual reports. Hope that helps.
Their recent conversion from an income trusts makes the number difficult to compare due to potential tax savings accrued. They basically don’t have enough history as a company in a way when you simply look at Google Finance or Yahoo for example.
Hi! I know this is somewhat off topic but I was wondering which blog platform are you using for this website? I’m getting sick and tired of WordPress because I’ve had issues with hackers and I’m looking at options for another platform. I would be awesome if you could point me in the direction of a good platform.
I am with WordPress. I have not had issues and my hosting provider is Hostgator. I am not sure if the hosting provider can make a difference but I assume it does.
All content posted on this blog represents my opinion and views and should never be considered professional advice. You should do your own research and consult with a professional financial advisor before making any investment decisions.
June 11th, 2010 | 
Category: 
… growth thru acquisition strategy … dividend relatively safe (cut during conversion) … currently raising cash via non-core asset sales (complete by year end) … good balance of oil + natty …buy below 10, strong buy below 8.40 … currently trading above 50dayMA (9.02), breaking above resistance (9.40), reverting to mean toward 200dayMA (10.02) … is hitting 9.70+ as i type on good volume (1.2m)… "may" trade off mid-sept thru late-oct/early-nov late with the broad markets as a "risk-off" macro political + economic event sell-off "may" play out … although judging by recent move up, some are not waiting … pays a nickel a month divie, attractively while you wait for better days ahead … my target range 11.80 – 12.40 … could also be taken out … holding at 5700 units via High Pine acquisition in summer 2009 … will try to grow this into 100 lots before Nov, market willing … watch asset sale outcome(s) thru year-end …
I'm currently holding Pengrowth, and have Daylight on my watch list. Has Daylight hit your target buy range yet?
@101 Centavos
I have always been interested in Daylight except for the variable dividend (cash distribution) as an income trust. It would look like that it has settle on the 5 cents per month for a 5.70% yield. I would nee to look at it again before making an entry point. I have been heavy in CPG at the moment with too much exposure to oil & gas producers.
how does Daylight energy pay a dividend when it is making negative earnings.
It used to be an Income Trust and paid Distribution which can be dividend or a return of capital. That’s why income trust accounting is more work as it impacts your ACB (Adjusted cost base) with all your distribution. That sais, a negative earnings for a short time can probably be sustained but not for too long. They would need to adjust their dividend. A good thing that you can do is contact their investor relations and asked. There could always be a one time expense that brings the earnings down, you would have to look at the annual reports. Hope that helps.
Their recent conversion from an income trusts makes the number difficult to compare due to potential tax savings accrued. They basically don’t have enough history as a company in a way when you simply look at Google Finance or Yahoo for example.
Hi! I know this is somewhat off topic but I was wondering which blog platform are you using for this website? I’m getting sick and tired of WordPress because I’ve had issues with hackers and I’m looking at options for another platform. I would be awesome if you could point me in the direction of a good platform.
@Bree
I am with WordPress. I have not had issues and my hosting provider is Hostgator. I am not sure if the hosting provider can make a difference but I assume it does.