Dividend Growth Split Corp T.DGS

Alternate Symbol(s): DDWWF | T.DGS.PR.A

The Funds investment objectives are to provide holders of Preferred shares with fixed, cumulative, preferential, quarterly cash distributions and to return the original issue price of 10.00 per Preferred share to shareholders at maturity; and to provide holders of Class A shares with regular monthly cash distributions, targeted to be at least 0.10 per Class A share, and the opportunity for growth in Net Asset Value per Class A share. The Fund invests, on an approximately equally weighted basis, in a portfolio consisting primarily of equity securities of Canadian dividend growth companies. In addition, the Fund may hold up to 20% of the total assets of the portfolio in global dividend growth companies for diversification and improved return potential, at the Managers discretion.

TSX:DGS - Post by User

Dividend Growth Split Corp > In at 6.40

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Comment by AnEducatoron Jun 01, 2023 7:20pm

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Post# 35475960

RE:In at 6.40

The true value of DGS is around $4.42, and yet the shares are trading at $5.18 despite not paying a dividend. In my opinion, the risk/reward metrics are terrible because the fund does not earn enough in dividends from its portfolio to cover those paid to preferred shareholders,let alone the management fees.

There is always hope - if the underlying portfolio goes up by 5% or more, DGS will reinstate the dividend and you may get lucky and be able to sell for $6.00 or more. However, in order to maintain the dividend, the markets will have to continue to rise in the months ahead and you will have to rely on people's willingness to continue paying huge premiums to the true value.