Dividend Growth Split Corp T.DGS

NAV @ 2:45 pm

[AnEducator]

~$15.28. Premium on capital shares: ~$0.13.

Virtually every stock in the portfolio is in the green. CP, IAG, and X are the only ones lagging. Tomorrow, the capital shares trade ex-dividend so the equivalent NAV would be ~$15.18.

[Splitfunding]

Does the NAV permanently drop/takes a hit every time a payment is made to either the capital or the preferred shares?

[mouserman]

Yes you will notice on ex divvy date the bank or brokerage many times will take the amount paid to commons off the price of the stock at the open of trading that day. . Preferreds arent reflected in  the NAV  until the next udpate.

[Splitfunding]

I was wondering why the NAV for split funds didn't reach previously attained levels despite the bounce back in the underlying stocks... Suppose that should have been obvious in hindsight, capital gains being used to pay the divy. But I always thought that the actual divided of the underlying holdings was also used for that, at least partially. Which begs the question... what does happen

[AnEducator]

The dividends collected from the underlying portfolio for DGS is insufficient to cover the dividends paid out even to preferred shareholders, let alone the capital shareholders. That does not even take into account the management fees, although they are quite reasonable. All of these split funds rely on capital appreciation to sustain dividends to both classes of shares. The primary reason the

[Splitfunding]

Yes I understand that. DGS's holdings are a little more diversified and I haven't attempted to figure out what the dividend payments of its holdings amount to but let's look at FFN for instance; the yearly dividends on its US and Can bank holdings is approx. 3% and was closer to 4% for most of the year until the recent surge in stock prices. Meanwhile the payment to the preferred

[mouserman]

FFN preferreds are now yielding more as they went up  for the payment in JANuary.  Fundamental Data - FFN.PR.A       Security Type Equity Shares Issued 52,028,792 Market Cap 526,531,000 Year High 10.12 Year Low 9.38 Annual

[Splitfunding]

Indeed that's a significant increase, why did they raise it so much? 

[mouserman]

It is actually written into the  FFN and FTN prospectus that the yield gets adjusted annually at a rate so many % above prime.. in line with many of the other floating preferreds out there.