BMO Capital analyst reported on Monday that he sees natural
resources company, Cliffs Natural Resources Inc(
) cutting its dividend significantly.
After finishing the shortened session with only a 0.9% increase
on Friday, analysts at the firm are forecasting a cut in the
stock's dividend. Analyst Tony Robson believes that the current
quarterly dividend of 62.5 cents is "not sustainable." This
dividend leaves the stock with a payout ratio close to 100 percent,
although the company is currently maintaining enough cash flow to
meet their dividend obligations for now.
Robson also noted that he believes that due to CLF's high
operating costs and leveraged iron-ore prices, the stock is a high
risk investment. He sees the dividend dropping to 28 cents, which
would leave the stock with a dividend yield of approximately 3.6%,
compared to its current yield of 8%
Cliffs Natural Resources shares were mostly flat during
premarket trading Monday.
The Bottom Line
Shares of Cliffs Natural Resources (
) have a 8.01% dividend yield, based on Friday's closing stock
price of $31.23. The stock has technical support in the $25-$27
price area. If the shares can firm up, we see overhead resistance
around the $34-$35 price levels.
Cliffs Natural Resources Inc(
)is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.1 out of 5 stars.
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, as well as a detailed explanation of
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