HTGC

Understanding the Phenomenon of “Price Risk” in High Yield

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  Image Source: Julien Carnot We want you to learn about a unique risk innate to the high yield space like the back of your hand. We’ll explain the “information contained in prices” and talk about what you should be on the lookout for, the “avalanche effect.” Order the High Yield Dividend Newsletter here. — By Brian Nelson, CFA — I received a question from a dear member of ours, and I think it may be helpful that I share the response. The question had to do with why we may be ultra-cautious on high-yielding stocks that are facing considerable price declines. The risk described below makes the high yield space uniquely different than other equity strategies, in our view, … Read more

Risky Business: Business Development Companies

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Big name business development companies (BDCs) such as Prospect Capital () and Main Street Capital () continue to be vulnerable equities, in our view, particularly as credit conditions deteriorate. Ongoing pressure in the energy and metals and mining markets has increased the wariness of investors and their propensity to tolerate weak credits (and those tied to them), and several factors loom that may significantly increase the already-high level of business-model risk associated with BDCs. Investing in these relatively obscure publicly-traded “venture capital” entities is not for the faint of heart. The market may bear witness to a surge in defaults within the high-yield arena in coming years, and a prolonged weakness in commodity prices may seal that fate. Mostly overleveraged upstream … Read more

Prospect Capital Cuts Dividend

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As is often the case, the larger the dividend yield the more risky the payout. I talk about this quite a bit in the video: ‘Dividends, Dividends, Dividends.’ Please have a look. All else equal, we tend to prefer cash-flow-based operating companies such as Microsoft (MSFT) rather than opaque, risky structures such as business development companies (BDC’s), where traditional fundamental analysis is less-informative. Sure enough, a dividend cut at Prospect Capital (PSEC) came in a warm holiday package today. The business development company announced that it will reduce cash dividends to shareholders to $0.08333 on a monthly basis with the following record and payment dates: 8.333 cents per share for February 2015 (record date of February 27, 2015 and payment … Read more

Dividend Increases for the Week Ending August 2 Included Illinois Tool Works and Union Pacific

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Below we provide a list of firms that upped their dividends for the week ending August 2. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Arbor Realty Trust (ABR): $0.13 per share quarterly dividend, was $0.12. B&G Foods (BGS): now $0.32 per share quarterly dividend, was $0.29. Carlisle Companies (CSL): now $0.22 per share quarterly dividend, was $0.20. CBOE Holdings (CBOE): now $0.18 per share quarterly dividend, was $0.15. Chemed Corporation (CHE): now $0.20 per share quarterly dividend, was $0.18. Comfort Systems: (FIX): now $0.055 per share quarterly dividend, was $0.05. Energizer Holdings (ENR): now $0.50 per share quarterly dividend, was $0.40. Ethan Allen Interiors … Read more

Firms Raising Their Dividends in the Week Ending March 1

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The flurry of dividend increases continues. Below we provide a list of firms that upped their dividends for the week ending March 1. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Firms Raising Their Dividends This Week Acadia Realty Trust (AKR): now $0.21 per share quarterly dividend, was $0.18. American Realty Capital Properties (ARCP): now $0.075 per share monthly dividend, was $0.7458. Big 5 Sporting Goods Corporation (BGFV): now $0.10 per share quarterly dividend, was $0.075. CBL & Associates Properties, Inc. (CBL): now $0.23 per share quarterly dividend, was $0.22. Cedar Fair (FUN): now $0.625 per share quarterly distribution, was $0.40. Chico’s (CHS): … Read more

If Yields Go Up, Are BDCs Done For?

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Key Takeaways: ·         What are BDCs? Business development companies (BDCs) allow small investors access to a private equity-like investment that often sports a high yield. ·         How do BDCs make money? Like any capital source, BDCs make the spread between the yield on investments and cost of the debt. BDCs can also make money from well-performing assets that are sold. ·         What are the Risks of BDCs? Poor portfolio performance, mismanagement, and interest rate swings are among the main risks to BDCs. ·         Why is the Sector under Pressure? Record low SBIC debenture costs could come to an end if interest rates rise. BDC investments start to look less attractive on a relative basis when yields rise. ·         Which BDC … Read more

Dividend Increases/Decreases for the Week Ending May 3

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Below we provide a list of firms that raised their dividends during the week ending May 3. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Alexander & Baldwin (ALEX): now $0.165 per share quarterly dividend, was $0.145. American Campus Communities (ACC): now $0.47 per share quarterly dividend, was $0.46. Ames National Corporation (ATLO): now $0.24 per share quarterly dividend, was $0.23. Apple (AAPL): now $0.77 per share quarterly dividend, was $0.73. BP Midstream Partners (BPMP): now $0.3126 per share quarterly dividend, was $0.3015. Cal-Maine Foods (CALM): now $0.272 per share quarterly … Read more

Dividend Increases/Decreases for the Week Ending November 8

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Below we provide a list of firms that raised their dividends during the week ending November 8. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Aaron’s (AAN): now $0.04 per share quarterly dividend, was $0.035. Acadia Realty Trust (AKR): now $0.29 per share quarterly dividend, was $0.28. Aircastle (AYR): now $0.32 per share quarterly dividend, was $0.30. Air Lease (AL): now $0.15 per share quarterly dividend, was $0.13. Algoma Central (AGMJF): now CAD 0.11 per share quarterly dividend, was CAD 0.10. Assurant (AIZ): now $0.63 per share quarterly dividend, was $0.60. … Read more

Dividend Increases/Decreases for the Week October 30

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Below we provide a list of firms that raised their dividends during the week ending October 30. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week AbbVie (ABBV): now $1.30 per share quarterly dividend, was $1.18. Agnico Eagle (AEM): now $0.35 per share quarterly dividend, was $0.20. Amkor Technology (AMKR): now $0.04 per share quarterly dividend. Arbor Realty Trust (ABR): now $0.32 per share quarterly dividend, was $0.31. Artisan Partners Asset Management (APAM): now $0.83 per share quarterly dividend, was $0.67. B. Riley Financial (RILY): now $0.375 per share quarterly dividend, was … Read more

Dividend Increases/Decreases for the Week April 30

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Below we provide a list of firms that raised their dividends during the week ending April 30. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Alexander & Baldwin (ALEX): now $0.16 per share quarterly dividend, was $0.15. Altra Industrial Motion (AIMC): now $0.08 per share quarterly dividend, was $0.06. Ameriprise Financial (AMP): now $1.13 per share quarterly dividend, was $1.04. American Water Works (AWK): now $0.6025 per share quarterly dividend, was $0.5500. Ames National (ATLO): now $0.26 per share quarterly dividend, was $0.25. Apple (AAPL): now $0.22 per share quarterly dividend, … Read more