There were no dividend cuts in the CE How They Rate coverage universe last month. But there was some really good news from a recent Dividend Watch List graduate.

We removed Chorus Aviation Inc (TSX: CHR/B, OTC: CHRVF) from the List in the December 2013 issue after it prevailed in its dispute with Air Canada (TSX: AC/B, OTC: AIDIF), which means no liability and no retroactive payment to Air Canada. And on Dec. 11, 2013, the company announced a 50 percent increase in its dividend.

Chorus won the protracted dispute with Air Canada over the rate it was paid over and above its controllable costs. Air Canada argued the mark up should be between 7 percent and 10 percent, while Chorus successfully argued it should remain unchanged at 12.5 percent.

CEO Joseph Randell had said at the height of the dispute that management could revisit the dividend cut should it prevail.

Mr. Randell said the new dividend rate would allow the company to continue with its cost- cutting efforts but at the same time reward shareholders.

In a statement released by the company Mr. Randell noted, “This dividend level has been set to allow the company to pay down current maturing debt, to continue to fund initiatives to reduce our costs, and to support capital projects and other growth opportunities.”

The dividend increase also indicates an improved and sustainable cash flow profile for Chorus.

The biggest issue for Chorus remains the fact that approximately 99 percent of its revenue comes from its partnership with Air Canada, which is set to expire in 2020. Efforts to diversify the business continue, though progress has been fitful. And competition is heating up.

This vulnerability is highlighted by Air Canada’s announcement that it will expand its relationship with Air Georgian Ltd by awarding its regional affiliate several new US cross-border routes that were previously flown by Chorus.

Air Canada, which is trying to cut the cost of its regional operations, announced the move the same day Chorus announced its 50 percent dividend increase.

Air Canada has publicly stated that it believed Chorus’ costs were too high and has been shopping around some of its regional routes to lower-cost rivals, including Air Georgian and Sky Regional Airlines.

Chorus remains a hold.

After Lightstream Resources Ltd (TSX: LTS, OTC: LSTMF) announced a 50 percent reduction in its monthly dividend rate from CAD0.08 per share to CAD0.04 on Nov. 21, 2013, the company’s share price slid from a previous day’s close of CAD6.05 on the Toronto Stock Exchange (TSX) to CAD5.57.

It continued to trend lower as investors who valued the dividend cycled out, bottoming at CAD5.15 on Dec. 11, 2013, down from CAD10.29 on Jan. 10, 2013, and CAD17.75 on March 9, 2012.

The longer-term decline indicated investors were questioning Lightstream’s ability to simultaneously fund its ambitious development plan while satisfying its significant debt obligations and also maintaining a CAD0.08 per month, CAD0.96 per year dividend rate.

The light-oil producer’s share price movements are now prompting questions of a different kind, as financial media have recently grilled CEO John Wright about an intraday spike of as much as 6.6 percent on Jan. 6, 2014. Mr. Wright offered no specific answer as to why the shares are rallying.

Lightstream closed at CAD5.88 on Jan. 9, 2013, up 14.2 percent from its December low.

Management has had very little time to implement its new strategic plan, focused on improving its sustainability ratio and strengthening its balance sheet, or to execute its capital program and get to work on meeting its production guidance for 2014.

Nor has it made any progress on its goal of CAD600 million of non-core asset sales by the end of 2015, with proceeds earmarked for debt reduction.

But recent share-price action could be an early sign that a new group of investors are recognizing that management is making difficult short-term choices that could pay off in the long term.

We’re maintaining Lighstream in the Portfolio for the next two quarters to allow management to demonstrate meaningful progress on its initiatives, including asset sales and debt reduction. Maintaining its current production rate is another key marker.

There is also the possibility that an improved balance sheet, coupled with Lightstream’s still-attractive collection of assets, could draw a takeover bid.

Lightstream Resources is a buy for aggressive investors up to USD8.

Please note that, because of the volatile nature of commodity pricing, all Oil and Gas companies in the How They Rate coverage universe should be considered permanent members of the “other receiving votes” section of the Dividend Watch List.

Here’s the rest of this month’s List. Not all members are sells, though the most conservative investors should avoid the lot of them.

Atlantic Power Corp (TSX: ATP, NYSE: AT) reported third-quarter and nine-month operating and financial results that in a vacuum were solid.

But management’s prepared remarks and answers to analysts’ questions during the company’s third-quarter conference call leave open the distinct possibility of another dividend cut announcement in early 2014. Sell.

Barrick Gold Corp’s (TSX: ABX, NYSE: ABX) third-quarter earnings beat estimates on solid operating performance. But a new bought-deal equity financing got a cool reception on Bay Street and Wall Street.

Management has also suspended operations at the USD8.5 billion Pascua-Lima min on the Argentina-Chile border, a move that should actually help stabilize the balance sheet.

The biggest gold producer in the world reported the second-biggest quarterly loss in Canadian corporate history for the second quarter and slashed its quarterly dividend rate by 75 percent to USD0.05 per share from USD0.20.

Despite the cost reductions and the dividend cut, Barrick’s balance sheet is still weak, burdened by USD15.8 billion of debt, though only USD1.8 billion is maturing between now and the end of 2015. Sell.

Bonavista Energy Corp (TSX: BNP, OTC: BNPUF) reported a 12 percent increase in third-quarter production to 73,632 barrels of oil equivalent per day, as natural gas output rose 18 percent and natural gas liquids (NGL) output was up 14 percent.

That and higher realized prices fueled a 46 percent increase in funds from operations (FFO) to CAD120.1 million, or CAD0.61 per share. The payout ratio for the period was 34 percent, down from 37 percent for the second quarter.

And management held the dividend steady at CAD0.07 on Nov. 18. Hold.

Colabor Group Inc (TSX: GCL, OTC: COLFF) reported a 1.9 percent decline in third-quarter sales to CAD343.6 million, though management emphasized the improvement compared to the second quarter and highlighted cost savings that are part of its turnaround strategy.

The dividend rate was maintained at CAD0.06 per share. Hold.

Eagle Energy Trust’s (TSX: EGL-U, OTC: ENYTF) third-quarter production was flat sequentially but up 8 percent year over year at 3,052 boe/d. Output growth on a year-to-date basis is up 22 percent.

FFO was up 17 percent to CAD11.6 million, or CAD0.37 per share, and the payout ratio for the period was down to 41 percent versus 67 percent for the second quarter. Management reiterated its 2013 guidance.

The small producer’s fortunes remain particularly tied to ups and downs of commodity prices. Hold.

Exchange Income Corp (TSX: EIF, OTC: EIFZF) reported third-quarter earnings before interest, taxation, depreciation and amortization (EBITDA) declined by half to CAD15.6 million due to margin pressures at rapidly growing WesTower business in the US.

Overall revenue was up 21 percent to CAD267.3 million, as its manufacturing unit posted 25 percent growth.

Management maintained the company’s CAD0.14 monthly dividend rate for the payment due Dec. 15, 2013, to shareholders of record as of Nov. 29, 2013.

Exchange Income’s share price has recovered from the three-year closing low of CAD17.99 it established on Oct. 7, 2013, on the Toronto Stock Exchange (TSX) in the aftermath of its third-quarter EBITDA warning, trading at CAD22.15 as of midday Thursday, Dec. 5.

Management emphasized at the time of its warning that a dividend cut was not being considered.

Management has navigated similar challenges with other of its operating businesses, and it is addressing the current issue head-on. We added Exchange Income to the Dividend Watch List out of an abundance of caution.

Exchange Income Corp, which is yielding 7.5 percent, remains a buy up to USD22.

FP Newspapers Inc (TSX: FP, OTC: FPNUF) reported a decline in third-quarter net income to CAD900,000, or CAD0.125 per share, from CAD1 million, or CAD0.141 per share a year ago. Revenue for FP Canadian Newspapers LP, in which FP Newspapers holds a 49 percent stake, slid by 4.5 percent to CAD25.1 million.

Management once again maintained the CAD0.05 dividend rate for the November payment due Dec. 31. But the payout ratio for the period soared to 200 percent. Sell.

Freehold Royalties Ltd (TSX: FRU, OTC: FRHLF) reported a 1 percent increase in third-quarter production to 8,699 boe/d, while average realized prices were up 23 percent.

This combination drove a 39 percent increase in FFO to CAD36.4 million, or CAD0.54 per share. The payout ratio for the period came down to 78 percent from 93 percent in the second quarter.

Debt reduction efforts have been significant and successful. But there’s not much margin for error for a relatively small producer that’s dependent on commodity prices rather than production growth to drive FFO growth and dividend stability. Hold.

GMP Capital Inc (TSX: GMP, GMPXF) reported a 26.6 percent decline in third-quarter revenue to CAD42.6 million, as management noted low levels of activity in the primary and secondary securities markets.

The net loss for the period was CAD0.01 per share, and the payout ratio was once again negative. Sell.

Labrador Iron Ore Royalty Corp (TSX: LIF, OTC: LIFZF) reported a 10.9 percent rise in third-quarter royalty income to CAD35.6 million, while distributable cash was up 8.1 percent to CAD20 million, or CAD0.31 per share.

Management declared CAD0.25 per share and CAD0.125 per share regular and special dividends on Sept. 17, 2013, maintaining the payout practice established during the preceding seven quarters.

Labrador is set to make its next dividend declaration on or about Dec. 9, 2013, and it looks as though the current policy will prevail.

The ultimate fate of the dividend is tied to what happens with the facility that generates Labrador’s cash flow. But if it sells itself all questions are answered. Hold.

New Flyer Industries Inc (TSX: NFI, OTC: NFYED) reported a 48.2 percent increase in third-quarter revenue to USD309 million, as bus deliveries grew by 49.5 percent to 577 equivalent units. Free cash flow surged by 121.8 percent to CAD13.1 million.

Backlog continued to expand, and management noted continuing signs of recovery in its markets. Another quarter along these lines and New Flyer will transport its way off the Watch List. Buy under USD10.

Northland Power Inc (TSX: NPI, OTC: NPIFF) reported third-quarter adjusted EBITDA of CAD75.7 million, a 101 percent increase attributable to new contributions from the North Battleford and ground-mounted solar facilities.

And S&P boosts the company’s rating to BBB from BBB-.

Management has conceded that the dividend won’t be covered by free cash flow until 2014., though it maintained the current rate. Hold.

Parallel Energy Trust’s (TSX: PLT-U, OTC: PEYTF) reported a 22.5 percent increase in third-quarter production on a year-over-year basis but a 4.8 percent sequential decline to 7,100 boe/d. Funds from operations were off by 4.4 percent compared to the second quarter but up 27.9 percent year over to CAD10.8 million, or CAD0.20 per share. The payout ratio crept up to 74 percent from 70 percent in the second quarter.

This small producer already has one dividend cut under its belt. And the sequential negatives are a little alarming. Hold.

Precious Metals & Mining Trust’s (TSX: MMP-U, OTC: PMMTF) manager, Sentry Investments Inc, announced on June 27, 2013, that Precious Metals & Mining’s monthly cash distribution “will be changed” from CAD0.07 per unit to CAD0.035 per unit.

This 50 percent cut became effective with the Aug. 15, 2013, payment to unitholders of record on July 31, 2013, and will remain at this level until further guidance is provided by Sentry.

The Sentry board made the move “given the current environment for gold mining equities,” which comprise the bulk of Precious Metals & Mining’s portfolio.

The price of bullion increased more than five-fold from 2003 to 2011. But major gold mining companies generated little to no free cash flow. And they’re likely to generate negative free cash over the next several years. Sell.

Ten Peaks Coffee Company Inc (TSX: TPK, OTC: SWSSF) reported a 5.5 percent slide in third-quarter sales, but gross profit was up 17.6 percent to CAD1.4 million and EBITDA more than doubled to CAD1.1 million as new business and market-share gains drove volume growth despite lower prices.

Coffee is still a tough, volatile business, and it’s a hard model on which to base a dividend-paying business. Hold.

Zargon Oil & Gas Ltd (TSX: ZAR, OTC: ZARFF) reported a 2 percent sequential increase in third-quarter production to 7,560 boe/d, as natural gas output rose 11 percent compared to the second quarter.

Funds from operations were up 3 percent to CAD16.5 million, or CAD0.55 per share.

The small oil and gas producer remains highly susceptible to fluctuating commodity prices, though management maintained the CAD0.06 monthly dividend rate for payments in November, December and January. Hold.