Three How They Rate companies cut dividends last month, Bonavista Energy Corp (TSX: BNP, OTC: BNPUF), CML Healthcare Inc (TSX: CLC, OTC: CMHIF) and Westshore Terminals Investment Corp (TSX: WTE, OTC: WTSHF).

As recently as December Bonavista was assuring investors it would be able to hold its dividend in 2013. But on Jan. 9 the company announced it would slash its payout by 41.7 percent to a new monthly rate of CAD0.07 per share.

The good news is the oil and gas producer’s shares were already pricing in a sizeable haircut. Consequently, there wasn’t much post-cut downside for the stock.

Management blamed “deterioration” in natural gas prices since the fall of 2012 and forecast “excessive pressure throughout 2013.” But Bonavista is also saving cash so it can finance production growth goals without running up debt.

Opportunities are substantial. Of the energy producers tracked in How They Rate, Bonavista is the most heavily weighted to natural gas liquids (NGLs), at roughly 17 percent of output. Costs are low, and management cited 1,600 potential drilling sites in a recent conference call. The company has a growing presence in the long-life Deep Basin area, where it boosted its lands by 18 percent with an acquisition completed last month.

Energy producers’ dividends follow energy prices. And a further steep drop in prices for oil, natural gas or NGLs would likely renew pressure on Bonavista’s dividend. In fact at least one Bay Street analyst stated following this cut that it “may not be enough” given the company’s projected end-year net debt-to-cash flow ratio of 2-to-1.

At this point, however, management is sticking to 2013 forecasts for capital spending and has increased its projection for production growth to 6 percent to 7 percent. With cash flow projections apparently based on quite conservative pricing assumptions, the dividend should hold, barring another plunge in energy prices. Bonavista Energy remains a buy up to USD15.

CML Healthcare has basically been retrenching since early 2010, when the depth of the problems at its now-shuttered US operations first came into focus. Last month management took what should be the final step in the process, announcing its intention to sell its diagnostic imaging business by the end of 2013.

The move essentially positions CML once again as a pure laboratory services company with all of its operations in Canada, a business it’s been in for 40 years-plus. Projected proceeds from the sale will go to reduce debt as well as to pay for more lab expansion. The move is expected to cut CAD4 million in annual expenses, though very likely with a one-time impairment charge.

Pulling back to the lab business also means less overall income for the company. As a result, CML is cutting its dividend by 29.8 percent and shifting the frequency to quarterly at an initial rate of CAD0.1325. That represents a company target of about 80 percent of “adjusted funds from continuing operations,” management’s primary gauge of profitability.

We’ve been waiting for the other shoe to drop at CML since the company exited the US market at a significant loss last year. The key question was how high a dividend the Canadian business would support on its own, and management has finally given its answer.

The good news at this point is the new rate is conservative and should hold. But until the diagnostic imaging sale is completed, CML Healthcare continues to rate a hold.

As I reported last month, Westshore’s January dividend was 16.7 percent below what it paid in October, as management reacted to the impairment of its coal shipping facility due to a shipping accident.

Unfortunately, damage appears to be worse than initially supposed and–as the company still doesn’t have a final estimate of costs–management has now suspended the dividend entirely.

Westshore’s latest public statement on the repairs is they should be completed by the end of April, ahead of initial projections. Encouragingly, no environmental issues have arisen from the cleanup or repair efforts. Although Berth 1 at the facility is still out of service, Berth 2 continues to operate normally. The company also carries property and business interruption insurance that should ultimately allow it to recover its losses.

As a result, Westshore’s problems should prove ephemeral, and dividends will probably resume with the July payment. The coal storage and loading terminal remains a critical piece of Western Canada’s export infrastructure, with opportunity for incremental expansion. And the balance sheet is solid, with no near-term debt maturities.

Given the fact that the stock price has barely budged since the accident and the temporary lack of a dividend, I’m not inclined to upgrade the stock to a buy at this point. Westshore Terminals is a hold.

Here’s the rest of the Dividend Watch List. Not all members are sells, though the most conservative investors should avoid these stocks. Note the large number of energy companies on the list, due mainly to cash flow squeezes from Canada-US price differentials.

AvenEx Energy Corp’s (TSX: AVF, OTC: AVNDF) sale of its Elbow River Marketing unit to Parkland Fuel Corp (TSX: PKI, OTC: PKIUF) has won final regulatory approvals. Now management is following through on the second piece of its strategic plan, combining with Pace Oil & Gas Ltd (TSX: PCE, OTC: PACEF) and Charger Energy Corp (TSX: CHX, OTC: SVWYF) to form Spyglass Resources Corp.

The post-merger company will be far stronger than any of its parts on their own. Nonetheless, it will still be fairly small with approximately 18,000 barrels per oil equivalent per day per day of production, at a time when profits are heavily affected by Canada-US price differentials.

AvenEx is currently fully priced to the deal. Sell.

Bonavista Energy Corp’s (TSX: BNP, OTC: BNPUF) place on the Watch List is detailed above. Buy under USD15.

Chorus Aviation Inc (TSX: CHR/B, OTC: CHRVF) has nothing new to report on its biggest issue over the past month, the arbitration case with Air Canada Inc (TSX: AC/A, OTC: AIDIF). Rumor is we’ll have some positive news when the company reports fourth-quarter and full year 2012 results on Feb. 21.

But given the rapid growth of rival WestJet Airlines Ltd (TSX: WJA, OTC: WJAFF), I don’t expect any improvement in the long-term problem of holding market share. Sell.

CML Healthcare Inc’s(TSX: CLC, OTC: CMHIF) place on the Watch List is detailed above. Hold.

Data Group Inc’s (TSX: DGI, OTC: DGPIF) biggest bugaboo is the opacity of its reporting, which makes it very difficult to ascertain the growth of its web-based services and whether or not the print business is shrinking.

That being said, even after the steep dividend cut announced in December this stock is pricing in a lot of bad news. Hold.

Enerplus Corp (TSX: ERF, NYSE: ERF) has earned an upgrade to a “buy” rating for aggressive investors following management’s recent affirmation of its dividend policy for 2013. The company also appears to be dodging the worst of Canada-US oil-price differentials by the use of rail for shipping its Bakken oil.

Energy dividends depend on energy prices. But after a very rough 2012 the tide may be turning at last for this company. Buy under USD15.

EnerVest Energy & Oil Sands Trust(TSX: EOS, OTC: EOSOF) is trading at a discount of more than 4 percent to net asset value.

But the biggest problem is that the distribution from this closed-end fund isn’t supported by investment income. Sell.

Extendicare Inc (TSX: EXE, OTC: EXETF) will likely report more solid numbers with its fourth-quarter earnings release on Feb. 28. But the real issue for the dividend will only come into focus when we know for certain what happens to Medicare reimbursement rates.

Management has prepared for the worst. But until there’s clarity the stock will remain on the Dividend Watch List. Buy under USD8.

FP Newspapers Inc (TSX: FP, OTC: FPNUF), for which no news is definitely good news, continues to pump out a nearly 14 percent dividend.

Sooner or later, however, the currently shrinking business has to expand or the payout will have to be cut. Sell.

Freehold Royalties Ltd (TSX: FRU, OTC: FRHLF) could suffer as widening Canada-US oil price differentials impact drilling activity on company lands as well as royalties collected on what is sold.

We’ll know more in mid-March with the earnings release. Hold.

GMP Capital Inc(TSX: GMP, GMPXF) announced major strategic moves last month, including the sale of certain operations for CAD10.75 million and cost savings through layoffs. That’s the result of the recently completed review of operations.

Surprisingly, the announcement didn’t include a dividend cut. But eventually market conditions will have to improve for the current figure to hold. Hold.

IBI Group Inc (TSX: IBG, OTC: IBIBF) insiders are buying the stock, which is promising, and there’s no reason to expect any negative change in guidance when the company reports numbers next month.

But a steep slowdown in global growth would pressure sales. Buy under USD8.

Labrador Iron Ore Royalty Corp’s (TSX: LIF, OTC: LIFZF) regular quarterly cash dividend of CAD0.25 isn’t at risk.

The CAD0.125 “special cash” portion of the payout, however, certainly is in jeopardy. And the global iron ore market does face some headwinds in early 2013. Hold.

New Flyer Industries Inc’s (TSX: NFI, OTC: NFYED) receipt of a CAD116 million strategic investment from Brazil-based bus body manufacturer Marcopolo SA (Brazil: POMO3) eliminates immediate financial pressures, and the company appears to be having more luck winning contracts.

Nonetheless, bus manufacturing profits depend largely on orders from municipalities, which have been challenged recently to stay within budgets. Hold.

Poseidon Concepts Corp (TSX: PSN, OTC: POOSF) management announced last month that it will scrape up the cash to pay the January dividend to shareholders of record as of Dec. 31, which was the day before my sell recommendation went into effect.

No payment date has been set, but when paid the money will show up in shareholders’ accounts. I’ll keep you posted. Sell.

Precious Metals & Mining Trust (TSX: MMP-U, OTC: PMMTF) hit a new low this week but still trades at a premium of 12 percent-plus to net asset value.

The 20 percent dividend is basically a return of capital and will be until metals stocks rally, if it’s not cut severely first. Sell.

Ten Peaks Coffee Company Inc (TSX: TPK, OTC: SWSSF) has a history of deep dividend cuts, demonstration that coffee is a tough business when it comes to supporting a regular dividend.

Next earnings are due out on or about March 21. Sell.

Zargon Oil & Gas Ltd (TSX: ZAR, OTC: ZARFF) is a small oil and gas producer. As such it’s always the most at risk when energy prices are weak. The key here is how badly the company is affected by Canada-US oil-price differentials.