Topic: How To Invest

Dividend Advisor Hotline – Friday, March 20, 2020

Article Excerpt

CHEMTRADE LOGISTICS INCOME FUND, $3.93, Toronto symbol CHE.UN, is still a buy, but only for highly aggressive investors. The company is one of the largest removal-service providers for resource firms that create acids and sulphur as by-products. Chemtrade generates earnings, and investor returns, by converting (and selling) those substances into useful chemicals such as sulphuric acid. Many of its removal contracts are with oil refineries and base-metal processors. With the April 2020 payment, the company will cut its monthly distribution by 50%, to $0.05 a unit from $0.10. Despite the cut, the new annual rate of $0.60 still yields a high 15.3%. Chemtrade has maintained that $0.10-per-unit monthly distribution since the beginning of 2007. However, given the current uncertainty in the global economy, it believes that it is prudent to reduce that amount to protect value for investors, conserve cash flow and avoid having to take on more debt to cover those payments. That should let the company, and its stock price, rebound…

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