In short: Not owned. The 8.4% dividend is "a red flag" — an equity-cost liability the market is starting to question (Desjardins called a "right-sizing" necessary). The Veren merger was the moment to reset capital policy and they didn't. Would only re-look if they cut the dividend and pivoted to buybacks.
Whitecap pays an 8.4% dividend, which Smead treats as a warning sign, not an attraction: it's a huge, guaranteed cash obligation to shareholders that pressures the business and usually ends in a cut. Its merger with Veren was the natural moment to reset that policy toward buybacks, and management didn't take it. He doesn't own it and would only reconsider if they cut the dividend and pivoted to repurchasing stock.
25:52Um, a lot of insider buying at White Cap. Thoughts on the stock at this price, this one coming from Blam97 on Instagram. Yeah, so we used to own White Cap back when they did their XTO deal. Um, we liked the aggression of that deal. They borrowed money for that. Um, it looked pretty accreative to us. I think what's kept us at a massive pause and we don't own it any longer is that white cap loves handing out dividends and what we're seeing in the current situation like if you go look at the sell side and some of the investors and
In short: Owned once, since exited — "the only Canadian name we've bought and gotten rid of." Liked the levered XTO-Canada deal, but disliked the large, ever-rising dividend (return lost to withholding + tax). On the Veren deal a shareholder should feel "incredibly disenfranchised." Not the best opportunity on a relative basis — though "I'm not saying I'd short it."
Whitecap is the one Canadian energy name Smead bought and then sold. He liked an earlier levered acquisition but soured on the company's habit of paying big, ever-rising dividends — which, for a US holder, leaks roughly a quarter of the payout to taxes. In its merger with Veren he thinks Whitecap holders got a raw deal: Veren ends up owning the majority, yet Whitecap's executives keep running the company because a rich premium was paid to preserve their jobs — a classic case of managers serving themselves over owners. He won't own it, though he's careful to say he wouldn't bet against it either.
33:39those assets they levered up for it we looked and said great this could be a great way to you know build nice attractive net worth on a per share basis and then coming out of that they just started raising the dividend and we thought that the stock was attractive to buy back back then obviously stocks gone lower but I just say that from the perspective of building that worth we just didn't like the capital um you know I I we just didn't see the view of it that that made sense for us and we we don't have to make money on
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