I certainly don’t think the dividend is going anywhere but up over the long-term. Just Released! Below are three stocks whose investors should proceed with caution, because there is a heightened chance of dividend cuts from them, for a variety of reasons. There’s certainly value there. I understand I can unsubscribe from these updates at any time. However, at the same time, that $0.145 monthly payout (which works out to $1.74 annually) is starting to look more and more unsustainable in light of Cineplex’s full-year earnings for 2018 of $1.22 per share and free cash flow per share of $1.47. Instead, the company uses an adjusted free cash flow to determine its dividend payout ratio, which it currently pegs at 70%. I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. Since 2016 when the revenue peaked, SSSG has been negative and the company has been earning less. All rights reserved. Simply click the link below to grab your free copy and discover all 5 of these stocks now. Why Alberta (and Your Oil Stocks’) Fate is Linked to… Bernie Sanders? Then there’s the recent dividend raise. In order to sustain its dividend, Surge needs an average price of at least $55 for WTI. Please read the Privacy Statement and Terms of Service for more information. This is your chance to get in early on what could prove to be very special investment advice. I disagree. Not to alarm you, but you’re about to miss an important event. What I find most disturbing about Cineplex’s latest earnings release was that attendance across the company’s chain of theatres continues to experience declines. Surge may therefore run into problems if global trade concerns continue to affect the price of oil. The Motley Fool Canada » Dividend Stocks » Does the Buck Stop With a Dividend Cut for Cineplex Inc (TSX:CGX) in 2019? Cineplex (TSX:CGX) stock lost 18.95% on the day of earnings. This spending, combined with the company’s generous dividend, has caused debt to balloon. That’s not good, particularly when you consider that attendance at U.S.-based rival AMC Entertainment Holdings was up 8.2% globally through the first nine months of 2018, including 6.4% in its U.S. markets. Currently the company pays $0.8556 out in dividends and has trailing 12-month earnings of $0.84. Returns since inception, October 2013. Granted those price increases have helped to keep the company afloat for the time being and have continued to support the firm’s regular $0.145 monthly dividend distribution. Live on Passive Income: 3 Top TSX Dividend Stocks to Buy in October 2020, Wherever the Market Goes, I’m Buying These Top TSX Stocks, Why Canopy Growth (TSX:WEED) Stock Fell Over 11% Last Month, Why Hexo (TSX:HEXO) Stock Fell 8.4% Last Month, 1 Safe High-Yield Dividend Stock to Buy for October. 5 Stocks Under $49 (FREE REPORT). First and foremost, movie attendance has been markedly weaker lately, for a number of different reasons. That’s a decent amount of cash for a company with a market cap of $1.9 billion. If I happened to be sitting on the board of directors at Cineplex right now, I think I’d be doing my best to avoid pandering to crowd that wants to avoid a dividend cut at all costs. Currently with all the investments it’s been making, debt has been on the rise. This is a good business just experiencing temporary problems. At the same time, the dividend has been outpacing the earnings, which could add up to a cut in the dividend. © 2020 The Motley Fool Canada, ULC. The CEO believes that this is just temporary, and as long as Pizza Pizza can weather the storm for the next while, its reserves can support the shortage in cash to pay the dividend. Cineplex’s shares were yielding 6.99% annually heading into Tuesday’s trading. Returns since inception, October 2013. The only way that Cineplex has managed to keep its revenues from falling is that its extracting increasingly more money from its customers each time they attend one of its theatre locations. It’s impossible to tell what will happen in the oil markets, but investors should be aware that the price of oil could greatly impact their investment in dividend paying oil companies, as many of us have seen in the past. I continue to like Cineplex here. 5 Stocks Under $49 (FREE REPORT). Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada. In the last four years alone, long-term debt has increased by approximately 50%. In short, investors are getting much more than just a movie company with an investment in Cineplex. This is your chance to get in early on what could prove to be very special investment advice. You don’t often see a company up the dividend if the board of directors is at all concerned with maintaining the payout. You can see management’s point, since much of its capital spending is growth-based and will not be repeated. The Scene VISA card (a partnership with Bank of Nova Scotia) continues to be one of Canada’s most popular credit cards. The company’s media division continues to grow nicely, and has recently signed a new agreement with the largest McDonald’s franchisee in Latin America to provide the restaurant chain with digital menu boards. The company is constantly spending to improve its theaters and to expand into other areas of the entertainment market (like restaurants, arcades, and golf, to name a few). Dividends can be especially rewarding when you are holding a stock long term and the company continues to raise it over time. Live on Passive Income: 3 Top TSX Dividend Stocks to Buy in October 2020, Wherever the Market Goes, I’m Buying These Top TSX Stocks, Why Canopy Growth (TSX:WEED) Stock Fell Over 11% Last Month, Why Hexo (TSX:HEXO) Stock Fell 8.4% Last Month, 1 Safe High-Yield Dividend Stock to Buy for October. Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada. Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune. Don't miss out!

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