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Compiling comments that experts make about stocks while on public TV.

2017-04-20

Opinion for Dividend Growth Split Corp (DGS-T)

Signal Price Bias Subject Owned
COMMENT $7.910 UNKNOWN DIVIDEND STOCKS AND MACRO STRATEGIES Unknown

Effectively a creation of a preferred share and a capital share. If the stock performed quite well, you are getting a leveraged investment effectively on the preferred share. EG, on a $60 stock, you could have a $30 preferred share and a $30 capital share. If the capital share goes from $60 to $66, you have now gone from $30 to $36 giving you a 10% improvement in terms of return. What people don’t realize is a) the leverage, but b) preferred shares in the structure have to be paid out first. Consequently, the way these are structured is that the dividend coming from the underlying portfolio, simply pays the dividend to the preferred share. If they are paying a dividend on the capital side, that is typically coming from expected price appreciation or option writing. If you are a higher risk investor, it is something you could consider.

Lorne Zeiler
Portfolio Manager & Wealth Advisor, TriDelta Financial

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