RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:They think we are stupid...
babedinkleman wrote: It seems difficult to comprehend that you are ok with this deal Jay considering you are always pushing for dividend raises. As you suggest.....diluting shareholders 11.57%.....in addition to $30-40 million? in debt with interest rates going up and they stick shareholders with a dividend raise of half a cent? Huh? Something just doesn't add up. They are looking at increased income of $8 million a year and paying out $700,000 of that to shareholders and payout ratio barely drops? It's like I'm in the twilight zone where everyone is insane but me....LOL.
Bullshiit about opening up the U.S. or not this is by far the worst deal they have ever made......and I've been around for them all. I figured they were looking at a big name franchise in the U.S. that would make the company.....not a janitorial service flying high on the back of covid as we may be moving into a recession.
Don't get me wrong, I'm not pleased with the dilution, as I said in my first response to this deal I would have rather them done a shareholder rights offering to fund the deal so that we can decide if we are into being diluted or willing to support by giving more funding money (MKP is the only company I've seen utilize this funding and I love it).
You realize that 700k on 8 million is 8.75% return which is higher than the current dividend rate, but you are correct this doesn't drop the payout ratio that much currently, but the 5% step ups the next few years is what moves the payout ratio in the future giving way to possible payout increases. My current guesstimation after this deal is they have around 4 cents of distributable income available for increased payouts if their reported maths are correct. Maybe we see anouther increase in the springs. That said all the increases that have been happening here have not kept up with inflation which is a concern.
As far as I'm concerned with interest rates we have over corrected now at 3.75, altho it is likely we see an increase to the rate again, maybe 2 hikes, I believe we will eventually fall backwards into the 3.25-3.5 area, so I feel the rising rate environment will subside, tho it will likely be in 2024 we see them fall back again.
I don't see this as a great deal, but it's something moving forward none the less that's enough to keep me sticking around to see what the actual income from the deal is. I'm not buying in more at this current point, but it's taken my sell thoughts off the table for a bit while I sit and watch. I'm just neutral on this deal at the moment.
Your concerns are noted. I would just like to see some results before I dislike the deal at the moment
I've had money available lately for investments and I've selected RE, ARE and CJ as places to invest the past 60 days, DIV has not been on the shortlist at all. I was kinda looking through my moves year to date and was surprised I've spent $50,000 on purchases this year (which for myself has been an almost 25% increase in portfolio holdings), not one has been DIV...