Recently in the newspaper there was a story about how the oil price is affecting the Saudi budget. The reason for the story is only a very few individuals outside the Saudi treasury office know for certain  – Saudi does not release the figures to the public. In North America – governments are suppose to be more transparent and release figures on line. In Saudi, they can keep things quieter. However, it is possible to estimate how the impact of oil prices is having an affect. (With estimates, one has to be careful and verify how the estimates were done.) The article published by Eric Reguly of the Globe and Mail titled Even Saudi Arabia may be feeling the sting of lower oil prices says we do know some things. We know the official budget is $ 220 billion; we know Saudi produces 9.7 million barrels a day, consumes internally 2.6 for an export total of 7.1 million a day.  From these you can determine at $ 50 a barrel the country would generate $ 130 billion; at $60 it generates $ 155 billion and at $ 90 breakeven. This means either the country’s cash reserves are going to be used or cuts in spending need to happen.

Linking to dividend paying stocks, you will not know everything or have perfect information but there will always be things you know or can easily find out. Analysis can be done. If you look at 10k reports you will find additional information. Linking it all to make a decision is what powers you to do what you do. Once you have made your decision if you choose dividend paying stocks, two great pieces of information on whether to keep or look for alternatives are is the company profitable? and can it pay its dividend?. If it is less profitable the dividend is going to be examined. If it remains profitable the dividend can be enhanced.

There are more questions than answers, till the next time – to raising questions