Why would people want to own an oil producer that borrows money to pay a 7.5% dividend, when you can buy a pipeline operator yielding 5% with an all-in POR well under 100% and lots of organic growth projects, and thus increasing cash flow and dividends in the future?
Why take on the risks of fluctuating oil futures markets, plugged pipelines, discounts to WTI, and all of the other risks associated with energy producers?
I simply don't get it. The yield simply doesn't counter the associated risks.
Has everyone turned from investing to gambling?