Pengrowth Cuts Distributions

As you may have noticed, I like annoucing when one of my companies increases its dividend payments. Well, sometimes the reverse occurs, and I decided that I should note as well.

Pengrowth Energy Trust has just annouced that distributions will be reduced by 25% to $0.17 per month, starting in Januray 2009.

The distribution cut is hardly surprising, but I am somewhat surprised that the cut is so mild. After all, the price of a barrel of oil has fallen from over $140 last July to about $40 right now.

Digging a little more explains this fact, though. Pengrowth uses forward price swaps and option contracts on about 50% of their oil production for 2009 (at $86) and 2010 (at $93). The trust also does this for natural gas, although to a lesser extent.

I own a very small position of Pengrowth in my DRiP portfolio (it is one of my newest positions). A nice feature of the reinvestment plan is that both the reinvested dividends and the additional purchases get a 5% discount. So not only do I get to add money without have to pay a commission, I get a discount on purchases. I plan on slowly increasing my position in the company in 2009, a few $100 at a time.

Fortis Increases Dividend

Another of the companies that I own in my DRiP portfolio, Fortis, has just annouced a small 4% dividend increase. On top of that, the company has added a 2% discount on shares purchased by the reinvested dividends.

Although this may look like an insignificant increase, it's still means that I'm getting a raise of 6% (since I reinvest those dividends). Who can say with confidence that they'll get that much of a raise at work this year, without having to do any more work, or even asking for it?

Enbridge Dividend Increase

Enbridge, one of the companies that I own in my DRiP portfolio, has just annouced that they are raising the dividend by 12%. Quarterly payments are increasing from $0.33 to $0.37, starting with their next payment in March 2009.

Isn't that nice? I'm getting paid more, without having to do anything. Even better, that increased dividend will continue buying even more shares of the company. That's the magic of dividend reinvestment and dividend growth.

Net Worth Update

As of December 1st, my net worth is $69 761 (down 1.6% from $70 885). If I exclude house-related assets and liabilities, my net worth is $45 557 (down 2.8% from $46 852). Things were still quite crazy on the financial markets at the beginning of the month, but they seem to be slowly stabilizing (meaning they're not dropping as fast as they did). I wouldn't be surprised, however, if the recession was to drag on for quite a while. But it is nototiously hard to predict these things, so I'm not going to worry about it and I'll stick to my plan.

Assets ($135 692, up 0.3% from $135 276)

• Bank Accounts $3 632 (up 10% from $3 291)
• Emergency Funds $3 354 (up 0.4% from $3 340)
• RRSP Accounts $32 889 (up 1.1% from $32 527)
• Non-Registered Investments $9 668 (slightly up from $9 660)
• Home $86 100 (stable)

Liabilities ($65 932, up 2.4% from $64 391)

• Credit Cards $3 992 (up 73% from $2 306)
• Mortgage $55 350 (down 0.2% from $55 469)
• Heat Pump Loan $6 545 (down 0.7% from $6 597)
• Line of Credit $0 (stable)

As planned, my credit card debt has risen due to some important car repairs. These were financed under a no-interest, 12-month payment plan. There was a slight delay for the replacement of our windows, so they haven't been billed on our line of credit yet. Due to that delay, we were able to negociate an arrangement under which they will be paid in two installments -- one in December and the other next May. So the replacement of those windows will have a lower impact on my monthly situation. By the time the second installment is to be paid, the first one will be long gone from our line of credit. We may even be able to pay for the second one without using the line of credit.