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

Shares of Cliffs Natural Resources (NYSE: 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.