When people talk about the checklist of elements that make for a good investment, one of the things you will invariably hear people say is this: Good management. Find companies that are being run by intelligent, forward-thinking people that can anticipate what will come and the risks posed in the future, and you will do well knowing that you entrusted your capital to good hands. The problem with this? A lot of times, talking about good management is a mere platitude and not something that you can actionably make decisions based on—if you visit a corporate website, you will see a lot of people looking regal in their suits accompanied by a list of impressive-sounding academic credentials coupled with two decades of jobs sounding like they involved a lot of responsibilities.
Even though I completely understand why investors find dividend cuts unpleasant, I hold the opinion that it is incredibly self-destructive to sell a profitable company after a dividend cut because it is almost assured that the price of the stock has fallen and you would be engaging in the practice of selling low. My opinion on this is intensified when it comes to commodity investing. Outside of, say, Exxon and Chevron, dividend cuts in the sector are fair game. You can grow production of oil and oil equivalents all you want, but if the price of the commodity falls 40%, 50%, 60%, it is unlikely that the company will generate the cash flow to keep the dividend payment stable.