In part one of a three-part 'outlook' series we have picked five big issues that the markets will be following closely in 2016. In this new format six regular Livewire contributors give their view either True or False to each scenario. These are the topics covered: BHP will cut their dividend; Woolworths sell or shut down Masters; A major miner or mining services company go bust; Sydney property falls by more than 5% and 'The Banks' trade below their 2015 lows. Matthew Kidman from Centennial Funds puts the curly questions to Chris Stott, Roger Montgomery, Steve Johnson, Romano Sala Tenna and Ben Clark to get their views - True or False on each topic. Click on the image below to watch this special edition of Buy Hold Sell
Note that Marius Kloppers says in this interview with inside Business at 10:35 that BHP has not cut it's dividend since the Great Depression. The board would know that, I think they will be very reluctant to be the first to cut in over 80 years. https://www.youtube.com/watch?v=F40cOyOeM_I
That was Marius Kloppers during much higher commodity prices. This is a company which earns around 60c and has been paying a dividend of over a $ 1.50. It has cash flow higher than profits due to depreciation. Depreciation is assets which are being written down as they need to be replaced. Paying a unchanged dividend would be irresponsible as a board and it is of no value to shareholders to receive a dividend paid for by taking on debt.