Dividend Growth Split Corp T.DGS

Question

[bubba9]

If DGS ever gets back to paying divs, do they have to come back at 10c/share or can they cut it ?

[navgod]

I don't believe they could change the divi rate until the next maturity/rollover date -- sept 2024.

[EdPaquette]

It would be hugely unpopular if the dividends were reduced and people would remember.  More likely they would consolidate shares which would be forgotten in a few months. 

[tailgator]

If? There is a 100% chance they get back to paying dividends. When you play splits you buy when they drop like this, it may be 6 months but you get a 50% return and a healthy dividend payment.

[Experienced]

Yep The thing is that when the NAV drops to the level that they stop paying dividends on the Commons, it doesn't mean that they aren't continuing to collect dividends on their stock ownership.  So when their investment holdings tank and they stop paying dividends, the cash from dividends collected over and above what is needed to pay the preferreds is available to buy cheap shares

[majortom75]

That may be true, but remember that on the way back up, if we get a V-shaped recovery, the covered calls they write at 30 delta are much more likely to go ITM which reduces the upside movement in the NAV. Best case scenario is a slowish grind back up. The fund keeps the premium from writing CCs and then they expire worthless and the fund keeps the shares.

[navgod]

Likely yes 100% no -- ask the holders of FTU a spLit of US banks.

[flamingogold]

Bang on! I have made the most money of any split on DGS but... only with patience. Buy when it's under the threshold for paying and then... wait. The distributions eventually come back and not for just a month or two as some splits do. This last stretch was a good 15 months. The point of entry under $5 is whatever the comfort level is. I prefer to start in the $3's. A little more scary