Advertising
Showing 1 to 15 of 16 entries
DON'T BUY
Uses leverage and if markets go into risk off, then it could be really bad. Incredibly volatile instrument. Not for the average investor. There is a big yield, but you need to be ready for significant volatility.
Financial Services
DON'T BUY
Would be concerned about the payout. Seeing a devaluation. He thinks the market’s already turned, but you see it in the financials first because of rising interest rates. The derivatives are the problem, especially with Deutsche Bank with lots of exposure to Italy and Turkey.
Financial Services
COMMENT

Look at risk events. How will this perform in a stress environment? In 2006, this ETF had a nasty drawdown, almost 30-40%. During a recession, would expect similar behaviour. Could be OK for next 6 months.

Financial Services
DON'T BUY

He is not an expert on this holding. It has a strong yield (around 10%) that attracts many investors. During the 2016 market meltdown, it fell by about 50%. So he feels there must be leverage in this product. He suggests looking into the prospectus to better understand the leverage.

Financial Services
COMMENT

Is the high-yield sustainable?As he understands it, this is a corporate finance, where they will take the common and preferred shares, and lever up the common 2 for 1 in terms of growth, and the preferred shares just get the yield. A very concentrated play on the direction of the underlying basket of common. If you believe those 15 stocks are something to be owning right now, you are going to get some good capital appreciation and the yield is safe. If you go into a bear market with the 15 stocks, your yield is not at all safe. This is not without risk.

Financial Services
COMMENT

As he understands how these split corps work, one gets the dividend and one gets the growth. It depends on what you want out of life. If you want street yield, these manufactured products might be right for you. He doesn’t buy them because he doesn’t like his clients to be paying 2 layers of fees. He isn’t against the product. Dividend yield of 14%.

Financial Services
DON'T BUY

It is a company invented by bankers. They take a collection of companies and package up the stocks and sell out preferred shares and capital shares. They sell call options to enhance the yield. They have to maintain a certain net asset value. The preferred shareholders are protected. You may suddenly get no yield some quarters. The fees and the risk are also high, as well as the yield.

Financial Services
COMMENT

Not a fan of split shares and doesn’t think they are an adequate substitute for GICs or bonds. Their make up is a little convoluted in that there is a Capital Share and a Preferred Share. Effectively all the dividends that come out of the Capital Share get thrown into the Preferred Share. If all those companies don’t do very well, the dividends get cut and the preferred share dividend is susceptible to getting cut as well.

Financial Services
COMMENT

This separates the preferred shares from the capital. The dividend is pretty safe, because they are stripping it away from the capital, and it is the banks. The real risk is if you are Long the capital portion, what if you don’t get capital appreciation quickly. These deals last for about 5 years. If you don’t have capital appreciation, and you have embedded fees, the leverage investment on the capital financials won’t work out that well. That is the real risk. Feels the banks are pretty good place to be with interest rates likely to go higher in the next 5 years.

Financial Services
COMMENT

Believes that they issue preferred shares, and then common shares alongside. Then they take the preferred share capital and double up on the dividend yield. If that is correct, then he personally believes it is probably okay, but he would rather go with just picking your own bank. If you want more of a yield you can use more leverage to do that, and thinks you are going to be better off longer-term.

Financial Services
DON'T BUY

14.5% yield. Look back further than a couple of years. The averaged yield has been 3%. In the ’08 crisis they went from about $18 to about $2. He believes they are paying out capital gains in their underlying companies. In the last few years there was no crisis so there was little risk.

Financial Services
COMMENT

With 14% yield it must be returning some capital. It is a closed-end fund so be careful. Split share companies give the dividends to one share and the growth to the other.

Financial Services
DON'T BUY

These “split share” structures are not his favourite. Offer high yields, but they split into common and preferred shares and everything is done to protect the preferred shares. If NAV declines to a certain point, the common share completely stops. The yield is great until something goes wrong. You are paying a management fee to hold a group of 15 stocks. If you are dealing with a discount broker, you can buy your own 15 stocks very, very cheaply and never pay a management fee again.

Financial Services
DON'T BUY

These engineered instruments are not his favourite things. They carry an embedded management fee which takes away from the eventual return to the shareholder. By buying all 6 banks and the 5 biggest banks in the US and insurance companies, it basically does pretty much the same as an exchange traded fund would do, but with a higher expense. You have to understand that the 14.7% dividend is not a dividend as you would normally understand, but is a distribution and is made up by a number of components. There is also a little bit of income from selling Covered Calls.

Financial Services
BUY

These are 15 banks, both Canadian and US and an interesting way to play the financial sector, purely from the banking side. They have taken 15 banks and split out the capital gains and growth of the dividends as one share class, the Capital Share. They have taken the dividends alone into the Preferred Share calling it the Preferred Class. What is interesting is that the US banks are not paying very rich dividends now, mainly because they have to get approval from a number of different regulators. There is an expectation that there may be more of this next year. Most of the dividends on the preferred shares are coming from the Canadian banks of about 3%-4%. In effect, they are lowering the cost of the stocks so that fixed dividend on a lower cost base gives you a higher yield on a preferred share of about 5.2%. Anything that grows beyond that accrues to the capital share. Canadian stocks have been raising dividends, hence the higher yield and there is a potential that US banks could start paying some interesting dividends next year.

Financial Services
Showing 1 to 15 of 16 entries

Financial 15 Split Corp(FTN-T) Rating

Ranking : 3 out of 5

Bullish - Buy Signals / Votes : 0

Neutral - Hold Signals / Votes : 0

Bearish - Sell Signals / Votes : 1

Total Signals / Votes : 1

Stockchase rating for Financial 15 Split Corp is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Financial 15 Split Corp(FTN-T) Frequently Asked Questions

What is Financial 15 Split Corp stock symbol?

Financial 15 Split Corp is a Canadian stock, trading under the symbol FTN-T on the Toronto Stock Exchange (FTN-CT). It is usually referred to as TSX:FTN or FTN-T

Is Financial 15 Split Corp a buy or a sell?

In the last year, 1 stock analyst published opinions about FTN-T. 0 analysts recommended to BUY the stock. 1 analyst recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Financial 15 Split Corp.

Is Financial 15 Split Corp a good investment or a top pick?

Financial 15 Split Corp was never recommended as a Top Pick on Stockchase. Read the latest stock experts ratings for Financial 15 Split Corp.

Why is Financial 15 Split Corp stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Financial 15 Split Corp worth watching?

1 stock analyst on Stockchase covered Financial 15 Split Corp In the last year. It is a trending stock that is worth watching.

What is Financial 15 Split Corp stock price?

On 2021-10-20, Financial 15 Split Corp (FTN-T) stock closed at a price of $11.58.