Diary of a Dividend Diva: Poseidon Concepts
High yield typically means high risk, so sorting through the "accidental high yielders" often means determining whether the dividend is safe and the market is over-reacting, or whether there is something you don't know (yet).
Frack-fluid provider Poseidon Concepts (POOSF in the U.S. on the OTC, PSN.TO on the Toronto exchange) joined this club last week, after posting a big earnings miss and lowering guidance. Fracking service providers had been on a roll until earlier this year, when natural gas exploration and production companies starting cutting back on drilling in the face of persistently low gas prices. Fracking is not disappearing, of course, and in fact is focused mainly on oil production, but all the service providers are seeing a softening pace of business. Although Poseidon is Canadian (based in Calgary), 85% of revenue is derived in the lower 48, so it is subject to the same forces affecting U.S. companies. The company says that the Bakken and Rockies were slowing substantially for their frack-water storage tanks, but southern geographies -- the liquid plays in the Permian basin for example -- held up....327 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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