Today, NBZ elected not to cut their 14.5% dividend and provided 2016 guidance. Wow...a 14.5% dividend ...really? No, here's how they do it. They pay shareholders with their own stock, resulting in about a 10% annual dilution of the company.
There are 112 million shares outstanding. At $0.04 per month ($0.48 per year) that would result in annual dividend costs of about $54 million per year - way too much. But 73% of outstanding common shares have elected to participate in the DRIP program, So, every year NBZ sends their DRIP shareholders $39.4 million in paper, instead of cash. At today's market price ($3.51) that equates to about a 10% dilution per annum.
The company has $276 million in debt denominated in USD. That works out to about $380 million CAD. at a very conservative 4.5% interest rate (I do not know the actual rate, but I submit that is a low-ball guess), that works out to annual interest payments of about $17 million CAD. Which , by the way is roughly the amount of funds from operations they are guiding for 2016 - EXCLUDING the effect of their 2016 hedges. They have excellent hedges in place for this year. 2017? ...not so much. The hedges are currently worth $150 million (mark-to-market in the money).
In my opinion, this is a rapidly diluting (deflating) lottery ticket, being held together by hedges that expire in just over 10 months....tick - tock.
...and by the way, they pay you to wait...with your own money,