E-L Financial Corp Ltd T.ELF

NCIB and SIB

[dangood]

They have recently purchased their own shares on the market:
Aug 9/21 Issuer E-L Financial Corporation Li...Direct Ownership Public market buy Common Shares 900.00 300 > 100% 300
and have also done a substantial issuer bid:
TORONTO, Nov. 9, 2020 /CNW/ - E-L Financial Corporation Limited (TSX:ELF) (TSX:ELF.PR.F) (TSX:ELF.PR.G) (TSX:ELF.PR.H) (the "Company") announced today its intention to commence a substantial issuer bid (the "Offer") pursuant to which the Company will offer to purchase up to $100,000,000 in value of its outstanding common shares (the "Shares") from holders of Shares (the "Shareholders") for cash.
so I'm not sure what more they can do for shareholders. As it is, the shares were worth roughly $2,000 and they paid out $80 per share so the shares should be worth roughly $1,920 today. For some reason there now is interest in the shares because of the size of the dividend and they shares trade at roughly what they were, $900. This makes no sense. This is not a normal dividend but a return of capital to shareholders. At 50 cents on the dollar, these shares should trade at $40 per share less now than they did prior to the dividend being paid.

[Thor16]

I don't understand - return of capital is tax deferred or in some cases tax free.  How is this a return of capital and not a dividend?

[dangood]

E-L Financial can claim a refundable dividend tax credit on the dividend and capital gain income it earns by paying this out to shareholders. These dividends are not from earnings of the operating company Empire Life. So basically E-L paid out $80 in cash and its net asset value would decrease by the same $80. I look at E-L Financial as basically like a closed ended investment fund which trade at

[Method]

  I assume EVT will pass it on in March 2022

[Thor16]

I suspect perhaps earlier.

[Method]

  When?

[Thor16]

Reasonable chance before calendar year end.  I'd expect a special before year end and a regular annual afterward as usual.  Could be wrong but i'd give it fairly good odds.  Due to laziness I haven't done the math however i think it equates to something like a 6% special all things equal.

[Method]

  Just curious why they would do it differently than the last two special dividends which were passed along the following March. Makes no sense to pay the tax earlier than needed, IMO, but we'll see if you're right.

[Thor16]

Suppose it depends on what the companies receiving the dividends have planned for the cash.  From a minority shareholder perspective it wouldn't make a difference however for the majority shareholder it may.  Again I could be wrong.  

[Method]

  well for me, I prefer to defer the taxes.

[Thor16]

For Sure!  pay now or pay later....later sounds pretty good! a buyback instead of a div would be nice.

[Method]

  They have a buyback in place. 

[Thor16]

How's that going for them?

[Method]

  They bought 30% of the float in the past 18 months

[Thor16]

Are you sure?

[chuck84]

hi thor, granted the ncib has been inactive since was renewed in march but am curious as to why you responded to safety this way. 2020's sib and ncib results are public as is HNR's ownership and thus float. 30% float retirement is pretty much spot on.

[Thor16]

Hey Chuck, Who is Safety?  Unless I am missing something - are you ablet to post a link showing where EVT has repurchased 30% of its public float in the last 18 months?  I am reading the NCIB numbers since 2019 and not seeing it.  It is possible I am missing it. Thanks!

[chuck84]

oops. method on this site goes by safety on others. the thread is about ELF not EVT. EVT has indeed not bought any back. EVT and UNC's float dried up years ago. ELF had somewhat of a float, albeit much less now than a year ago.

[chuck84]

i see the confusion here how thread transitioned from ELF to EVT. method clearly referencing ELF despite conversation having shifted to EVT. EVT will likely dividend out what was ust received from ELF in March as method suggests, as they do every year. while NCIB exists, don't expect much activity, there simply isnt the float/trading volumes ELF's next move, if any,  is what you

[Thor16]

Best guess says EVT goes private before ELF.

[chuck84]

wouldn't disagree. i've long believed that neither UNC nor EVT would be taken private until they had cleaned up the ELF float to similar levels, which we are getting close to, for fear doing so would tip their hand on ELF. the Thrid Canadian complex was virtually identical in one parent and two closed end funds. in that case the parent and one closed fund went private years ago, leaving

[Thor16]

Are you referring to RDTOH?

[DanGood38]

Yes. If the company decides to pay this out it is "taken" from this account otherwise it builds up and can be paid out later.