Professor Elam

Monday Sept 23 2013

Last week we ran an article describing how Sears, Radio Shack, and JC Penny had lost their way. 

Today we spotlight Nustar Eenergy.  Nustar got off into asphalt nd crude oil refining. The asphalt market plunged on the financial crisis and the small refinery, just down the street from TAMUSA, has been sold. 

Now Nustar gets back to the pipeline and storage business. This article notes that CEO Anastasio will be cutting lots of General and Administrative Expenses. 

NS is paying a $438 dividend but only earned $.09 per share. How long can that last?  An 11.5% dividend when the 30 year Treasury is paying 3.8% is rather out of line. Such high payouts are a sign of potential dividend cuts. 

Managerial accounting needs to be forward looking. All these companies are good examples of that.