RE:RE:RE:RE:RE:NAME ONE DIV. PAYING SPLIT SHARE TRADING AT A LOWER PREMIUM?ryangazder wrote: I give this a draw only because you're right but also because FTN is the most diversified, and best managed with the best dividend payment history.
FFN holds mostly the same stocks. If you want diversity, how about DFN? It holds more than just financials and has a 100% payment record.
Other splits that have a 100% record are PIC.A, TXT.UN and BK and they are all financials. GDV, PRM and ENS also have not missed, but they are quite new, whereas PIC.A and TXT.UN have been around over 20 years, DFN 15 years and BK close to 14 years.
FTN has missed over 20 payments while PDV only five and SBC only four. DGS was doing well (only five missed) until late last year but still a better record than FTN. LBS has missed 10.
FTN pays the most, but it does not have the best record and tends to trade at the highest premium which means investors are not getting the full yield that would be available if they were able to buy at NAV.
As an example, consider the following NAVs and prices:
| NAV | Price | Premium | Distribution | Yield |
| $5.83 | $5.83 | 0.00% | $0.1257 | 25.87% |
| $5.83 | $6.00 | 2.92% | $0.1257 | 25.14% |
| $5.83 | $7.00 | 20.07% | $0.1257 | 21.55% |
| $5.83 | $8.00 | 37.22% | $0.1257 | 18.86% |
| $5.83 | $8.13 | 39.45% | $0.1257 | 18.55% |
| $5.83 | $9.00 | 54.37% | $0.1257 | 16.76% |
| $5.83 | $10.00 | 71.53% | $0.1257 | 15.08% |
The fund pays out $0.1257 no matter what the price is and by paying a premium, investors are taking a lower yield than is available were they to buy at NAV.
As for best managed, that is up for discussion. Does best managed mean never missing a payment? Paying a sustainable distribution? Paying the highest distribution? FTN is the only split I have observed to raise the distribution from $0.10 to $0.1257. Perhaps if they left it at $0.10 they would not have had to suspend distributions in 2011 and 2018? Reporting NAV on a regular basis? Charging the lowest management fees? Having the best market sense for when to buy and sell and when to hold more cash? When to write options and how many and when to close open positions? How much leverage is optimum? (i.e how much differently will the fund perform when the NAV is $20 or more rather than $15?)
On Quadravest's most recent distribution report for January 2019, it lists the yield of FTN as 18.4%, FFN at 18.2% and DFN as 14.0%. Yields are as of market close on January 21. FTN, FFN and DFN tend to have the highest premiums (in that order) even though DFN has the best record and greater diversity. This suggests that yield is the primary factor being considered by purchasers.