VET - Vermilion Energy: Earnings Pressure Its Huge Dividend

In my previous article, I argued Vermilion Energy's (VET) 14%+ dividend yield was sustainable at second-quarter commodity prices. I also wrote the dividend payout ratio was too high given the company's leverage.

Despite mixed third-quarter results, management maintained the dividend. But given the company's next-year capital program, I estimate a dividend reduction is becoming more and more likely if oil and gas prices don't match management's assumptions.

Image source: Jp26jp via Pixabay

Note: All the numbers in the article are in Canadian dollars unless otherwise noted.

The dividend payout ratio is increasing

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