JayBanks wrote:
babedinkleman wrote:
I'd be interested in what some of these companies are Jay. I'm liking Alaris in here....just hate the dividend tax treatment. Alaris is more agile than DIV.....gets a better return on their money......has a better payout ratio etc etc. Did you ever completely get out of Automotive Stinco?
Ohhh let's dive inside my mind a bit... Buckle up and put your splash coat on it could get wild! LoL
So let's just pre-face this as far as DIV is concerned and why I'm looking at moving out and as a comparison for my thoughts going forward.
Based on the todays close price of 2.89 the current yeild on 22 cents is 7.61%, my indicated possible sell point I'd roughly say is 3.40 which if the dividend doesn't move is 6.47% yeild and the 51 cents of upside to my sell number represents 15% gain. As I mentioned in a previous post they have a distributable income currently of 25.56 cents if that's the value I'm buying off on a 100% payout ratio scenario the current yeild would be 8.84% & at 3.40 = 7.52%...
So to summarize what I'm looking at is other names that I feel I might be able to do better than 15% upside and/or 7.52-8.84 yeild in a near to mid term time frame...
CJ - won't spend much time on this, Oil and gas name, I currently own an oversized position in my portfolio on but not against adding to it, at todays close its yeilding 7.29% but at $90 oil they could likely double the payout and has anywhere between $14-24 upside which would be 41%-291%... highly speculative and somewhat risky... I'll lump most of the more well known producers names in this idea because they all have similar speculative profile
ORC.B - rather unknown gas producer based in Tanzania, based on current close it has an 8% yeild which may have upside to being raised somewhat significantly at some point. The shareprice potential is difficult as it's lowly traded and makes quick moves, but I would actually look at getting in at like $4.75 which would be 8.42% yeild and it has moved as high as $5.60 which is about 15% upside (rather similar to DIV but has potential to be more interesting)
DBM - Wholesale home building material distributor, housing market may fall for buys and sells but new constructions and renovations will always be happening and unlikely to scale backwards. Currently 8.86% yeild, it's moved up and down but I feel $8 is fair value I'd say it is 21% below that and that's not even talking upside potential. I haven't dug in overly deep on them tho so there maybe things to uncover I'm overlooking.
ET - I'm not a big tech guy, but looking as the history of this company and what it sells it seems interesting. Currently has a 4.87 yeild but 4 times in the past 9 years it's paid a special well over double it's yearly payout. It also looks like something that trades up and down frequently with a 10-20% spread, jumping in on a low could be fun and lucrative to play with. Buying at $13 would give a regular 5.54% yeild and say every 3 years getting an extra dollar would pay me 8.1% yeild average with that 20% tradeable upside and possibly more. I personally need to understand more about the company and what's going on, but I wouldn't be against a blind play.
WBE - very small company that makes disposable paper products for medical, industrial and commercial restaurant use. I already own this at a much much higher in price on a small starter allocation. At the close today it yeilds 6.06% but waiting on results to see what its numbers look like as it's done some upgrading and expansion. If you read the board there anouther member broke down some potential on its income base on last report. Really like it's story, management seems extreamly straight forward and very excellent capital allocators, could see a payout doubling in the shorter term which would subject is current 33 cent share price jumping 2-4x quickly. It got a bit crazy during the pandemic because it had a short term contract with the government for sanitized and other products in which it shared much of the proceeds with the shareholders before doing upgrading and expansion. Seems very profitable and doesn't like debt.
UFC - developer and rent collector. I'm yet to do a super deep dive on this, it seems like it should be a REIT but doesn't word itself like one. Currently yeilds 5.55% but has been growing the payout significantly infrequently. At 90 cents it's a penny play that I have no idea on upside but it traded around 1.30 about a year ago so it's down a little over 30% but also might have been a case of over bought.
2 options in my favorite place to collect money:
BRE - Real Estate service provider, this is your sit and collect scenario as it hasn't moved it's payout in 5 years and I don't expect it to anytime soon, but it's not widely know, trades thinly and sharply and you can get in for great yeilds. I'm already in for an 8.73% yeild, currently it's at 9.55% yeild and was recently bottoming at 10.4% yeild, the upside is based on normalization of its trading which is 16.50ish sometimes above, which is about 14.3% upside, also monthly payout. It's kinda a direct sideways move with 2% higher current payout, but I can't say it has potential to increase its payout.
MKP (one of my first purchases, largest weighting and all intents and purposes favorite stock) - 2nd tier specialty mortgage lender. Currently yeilds 8.78%, grows infrequently, payouts significant specials from time to time and when it needs to acquire more proceeds for investment it usually comes to shareholders with rights based offerings below market. I enjoy adding to this investment and collecting the proceeds.
Since DIV is a Royalty let's look at other interesting options at different points....
FRU - Energy Royalty most know it, currently yeilds 7.88%, has a much lower payout ratio to DIV, it's also below it's stated payout ratio guidance even after increasing the payout, upside is up for debate but it's based on how much it pays out. (I already own at much lower price so I would be adding to position)
LIF - Iron Ore Royalty, again pretty well known, extreamly volatile and has no real trend. Apparently it's payer of the royalty has upgraded operations so it has a good future outlook, but what is the price to pay for this? Yeild is difficult to put your finger on as the payouts are irregular quarterly and could be anywhere from 6-25% depending on how you want to play with the numbers. I'm interested at riding the rollercoaster but I would like a low 20s price as I feel it could average around a dollar+ per quarter which would be a 12-20% yeild depending where I get in. I wouldn't be comfortable in this but YOLO lol
NWX - Energy Royalty producing in Australia. I discuss this quarterly or news based on its board. I've jumped in and out strategically when I feel there's money to be made, should I get a good price I may jump into hold longer but there are major holes and warning signs in this name. I base my projections off a 6 cent per year payout as it jumps up and down quarterly between 1 and 2 cents. Currently on 6 cents it would be a 14.29% yeild, but it's only paying 1 penny this quarter and it likely should stablize at that payout for its health which would be a 9.52% yeild. I feel that because of its major risk and declining balance sheet that it's 10-12 cents over priced... your dealing with a crazy little royalty here and you would be playing the game report to report.
RE - Renewable Energy project based royalty, isn't far along yet but seems like it would have major upside potential but I need to do a deeper dive. 5.4% yeild but I wonder if it has major upside potential as it matures. Longer outlook play.
NOVR - very new mining resource royalty, does not payout yet, but it 95% of its projects are not in production yet but most will be within the next 1-3 years, the price seems quite small for what it seems to hold as most of the mines under royalty are fully permitted and under construction and owned/operated by noteable and reputable operators. I'm very interested in taking a flyer on this one and seeing what happens as I believe this looks like it could be a solid income play on a ton of mining exposure to various resources. I've dug around looking at several of the projects and am excited, I just need to dive in.
SSR - extreamly new Light oil focused Royalty with some other gas/oil assets. Today's yeild is 7.59% yeild on a 38% payout ratio. Also consider its holding 33 cents per share in cash. If you figure buy in today at 79 cents, you still hold 33 cents in cash that payout is a 13.04% yeild on the 46 cents of value of the current paying royalties... and that's only 38% payout ratio! If they up the ratio to say 50-60% your looking at nearly 20% yeild on actual invested capital or 10%ish on actual share price and it's obviously still looking to aquire. I haven't done a deep dive, but those surface numbers are rather crazy I'm sure it's too good to be true but it's a big interest of mine.
And a specialty REIT...
MPCT - I can't get much straight info on this other than it is a REIT that seems to specialize in multi-family rentals. It makes wild swings and currently yeilds 8.08%. It's in a dip right now but seems like it should be much higher. I'm thinking about putting in a starter position just to recieve shareholder information books so I can dive deeper into the holdings. But as a trade it seems like it could have wild upside as a short term play.
These are a few places I'm thinking about that might have more to offer than DIV while earning a higher or less but higher potential payout.
As for your other question on AFCC... I'd rather not talk about it... which means NO!... I'm still collecting the payouts, it moved to quickly on me when I was trying to be greedy in exiting with a gain. I tried for 2.15 and failed, I lowered to 2.10 but and the active range lowered on me (I did sell some shares at an even 2 as I needed the $$$ to go elsewhere that day), 2.05 and it dropped lower on me, and in April I finally resigned to sell at 2 when it hit that point one day and someone had shares infront of me and I didn't get it filled, then May happened... I have no current sell order in, on an overall basis I'm down 5% on that play so I'm not hurting, just frustrated that I seen the fall off coming, warned everyone on the board that bad things could and would likely happen but wasn't smart enough to make the move I knew I needed to. The investment is also only like 1% of my portfolio so it's almost not worth mentioning lol.
If anyone has other suggestions of names that are noteable I would love to look at them! I have others on watchlists that I didn't mention because I don't believe in them or haven't done enough looking at them to make them worth mentioning