Dividend reinvestment plan After paying, maintaining and raising the cash dividend since at least 1999, why did the company all of a sudden decide to give shareholders the option of getting paid-in-kind? We keep hearing that HCG is not just adequately capitalized, but that it is actually overcapitalized. Bulls we speak to want the company to buy back more stock, increase the dividend, and even do another Dutch Auction Tender like the one from last year. The "liquidity preserving" move of installing a DRIP plan seems to be at odds with a company that is purportedly flush with liquidity.
We have seen the DRIP move before, from companies that are trying to shore up liquidity without raising obvious red flags. HCG's decision to install a DRIP plan made us wonder - could something be wrong with HCG's deposit base even while there are only limited signs of any cracks in the Canadian housing market?