Dividend Growth Split Corp | StockChase
3
Dividend Growth Split Corp (DGS-T)

Last Price Recorded: $8.1800 on 2018-01-17

ON STOCKCHASE SINCE Jan 2016

0
3
Dividend Growth Split Corp (DGS-T)

Last Price Recorded: $8.1800 on 2018-01-17

ON STOCKCHASE SINCE Jan 2016


Dividend Growth Split Corp


Signal Opinion Expert
COMMENT

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.

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.

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Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial...

PricePrice
$7.910
Owned Owned
Unknown

DON'T BUY

Split Corps.  When he sees yields of 13-14% and predicated on covered calls and preferreds, he does not see consistent 13-14% yields in the stocks.  He is leery of the yield.

Split Corps.  When he sees yields of 13-14% and predicated on covered calls and preferreds, he does not see consistent 13-14% yields in the stocks.  He is leery of the yield.

0
John Hood

President & Portfolio Manager, J. C Hood Investment...

PricePrice
$6.710
Owned Owned
Unknown

DON'T BUY

A vehicle where they split out appreciating assets from the dividend. They pay the dividend stream of income to another holder, and you get a leveraged play on the dividend stocks without the dividend. Not a very good idea to own one of these in a down market. When you think markets are going to go the other way, it is not a bad way to get capital appreciation.

A vehicle where they split out appreciating assets from the dividend. They pay the dividend stream of income to another holder, and you get a leveraged play on the dividend stocks without the dividend. Not a very good idea to own one of these in a down market. When you think markets are going to go the other way, it is not a bad way to get capital appreciation.

0
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$4.670
Owned Owned
Unknown

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