BMO Says Cliffs Needs to Reduce Dividend Soon; Notes Oversold Conditions

Shares of Cliffs Natural Resources CLF are not participating in Friday's rally as investors may be weighing an earlier research note from BMO Capital's Tony Robson. The stock is up 0.7 percent, versus a 0.9 percent gain in the DJIA. The analyst is warning Cliffs dividend is not sustainable at current levels. Robson reduced his quarterly dividend estimate to $0.28/share; Cliffs currently pays a dividend of $0.625/share per quarter. Despite the warning, Robson said Cliffs remains a high-risk iron play given the company's moderate-higher operations cost and leverage to iron-ore prices. Robson believes Cliffs shares are currently oversold. The stock has fallen more than 30 percent since mid October.