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Financial 15 Split Corp T.FTN

Alternate Symbol(s):  FNNCF | T.FTN.PR.A

Financial 15 Split Corp. is a mutual fund, which invests in a portfolio consisting of over 15 financial services companies. The Company offers two types of shares, such as Preferred Shares and Class A Shares. Its investment objectives with respect to Preferred Shares are to provide holders of Preferred Shares with cumulative preferential monthly cash dividends in an amount of over 6.75% annually and to pay the holders of the Preferred Shares approximately $10 per Preferred Share on or about the termination date. Its investment objectives with respect to Class A Shares are to provide holders of Class A Shares with regular monthly cash distributions and to permit holders to participate in all growth in the net asset value of the Company over $15 per unit, by paying holders on or about the termination date such amounts as remain in the Company after paying over $10 per Preferred Share. The Company’s investment manager is Quadravest Capital Management Inc.


TSX:FTN - Post by User

Comment by alkhoron Jan 05, 2024 2:34pm
201 Views
Post# 35812909

RE:Can anyone explain how this stock can pay

RE:Can anyone explain how this stock can payThe simple answer is, over the long term it can't. Every single one of these split funds eventually head to a NAV of $15. Once it gets below the $15 barrier it stops paying the common shares so they have the funds to start increasing the NAV back over the $15.
A few years ago FTN was wallowing well below the $15 threshold with little chance of getting over it in the foreseeable future  They devalued the commons by 40% and reduced the share count accordingly in order to bring the NAV back to over $22. Looks good noe that they did this but one has to remember the common shareholders lost 40% of the investment. 

Now FTN is well below the consolidated $22 NAV and is slowly heading down to $15.

The big answer is, yes, the 19% dividend looks good, but over the long term, in can be a big loser. Much better off in the lower dividend preferred shares as they just keep on paying.
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