State vs. Individual: The Power Struggle at Genesis Energy

Ladies and Gentlemen, BUYERS AND SELLERS, listen up! We're diving into the electrifying world of Genesis Energy Limited (NZSE:GNE), where individual investors own 42% of the company, but the state or government holds the majority stake with 51% ownership. This is a power struggle you don't want to miss!



First things first, let's talk about the benefits for individual investors. With a trailing yield of around 6.2% on the current share price of NZ$2.27, Genesis Energy is a dividend darling. The company has been increasing its dividend at approximately 0.6% a year on average over the past 10 years, providing a steady stream of income for investors. Plus, with earnings skyrocketing up 21% per annum for the past five years, there's plenty of growth potential to boot!

But here's the catch: individual investors have limited control over the company's decisions and direction. The majority stake held by the state or government can lead to decisions that may not always align with the interests of individual investors. And let's not forget about the risk of dividend sustainability. While Genesis Energy's dividends were not well covered by profits, they are affordable from a cash perspective. However, if the company continues to pay out more than it earns, there is a risk that the dividend may not be sustainable in a downturn.

Now, let's talk about the potential drawbacks for individual investors. The majority stake held by the state or government can lead to political interference, which can negatively impact the company's operations and performance. For instance, the government may impose policies or regulations that are not favorable to the company or its shareholders. And let's not forget about the lack of transparency that can come with government involvement. This can make it difficult for individual investors to make informed decisions.

So, what's the bottom line? Individual investors need to be aware of the potential risks and benefits of owning shares in Genesis Energy Limited. While the company has a strong dividend yield and growth potential, the majority stake held by the state or government can lead to decisions that may not always align with the interests of individual investors. And with the risk of dividend sustainability and potential political interference, it's important for individual investors to do their due diligence before making any investment decisions.



So, are you ready to take on the challenge of investing in Genesis Energy Limited? Or are you going to sit on the sidelines and watch from the sidelines? The choice is yours, but remember, this is a power struggle you don't want to miss!