Retirees: Diamond Offshore Dividend Is Not That Enticing

Summary
Diamond Offshore continues to navigate difficult waters. Management expects minimal contracting activity to continue, and most business is of shorter duration terms.
Since January 2006, Diamond Offshore has paid total dividends of ~$5.7 billion, amounting to a total of $41+ per share, but the future is all that matters for investors.
Though the special dividends are nice, it's difficult for advisors to build a plan around these seemingly 'upside' surprises, which are not guaranteed.
Let's take a look at the company's investment considerations as we attempt to uncover the drivers behind its Dividend Cushion ratio.
Retirees know that a dividend cut could be disastrous to their income portfolio, as future income is not only reduced, but it is also very likely that capital is permanently impaired. The Valuentum Dividend Cushion ratio, a very simple coverage metric, is designed to provide the income investor with a trusted and independent opinion of the safety and future growth potential of a firm's dividend. It not only has shown to predict dividend cuts, but the 'cushion' behind the Valuentum Dividend Cushion reveals just how much capacity a firm has to continue growing its dividend into the future.
Technically speaking, the Valuentum Dividend Cushion ratio considers the firm's net cash on its balance sheet (cash less debt) and adds that to its forecasted future free cash flows (cash from operations less capital... Read more

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