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American Capital, Ltd. Message Board

  • ted_milligan ted_milligan Jul 31, 2013 12:04 PM Flag

    Want a dividend?

    If NAV=PPS Then DIVIDEND. Not hard to understand why they are buying up the stock.

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    • Not sure why management can't pay a dividend AND conduct a buyback. It isn't hard to do. I am disappointed in the lack of urgency that management displays when it comes to returning capital to shareholders via a dividend. Their current approach of increasing PPS to NAV doesn't seem to be working.

      • 1 Reply to valueseeker2011
      • Because they're seeking to capture the maximum benefit possible from the expenditure; the tax advantages alone are enough to justify the current course. It's not like this is a new or recently-changed strategy; why are you so surprised that they're doing *exactly* what they said they'd do?

        Jaded Consumer (Seeking Alpha) put it very well in the comments section of his most recent article: "The dividend is just not the play here. Dividend-requiring buyers should look elsewhere until the tax situation changes and there's a compliance-driven dividend issuance requirement in a few years."

        If you're so distraught that management isn't planning on reinstating a quarterly dividend (despite the fact that this has been clear for several years) you may be better off moving to a stock which does. I own SDRL, SFL, QCOR, and would recommend looking at all of them.

        Sentiment: Buy

    • "If NAV=PPS Then DIVIDEND"
      You make it sound like the shareholder controls that. Many people at this point are saying pay some divvy each quarter and the market may respect the NAV by paying more per share.

      • 1 Reply to arthaiss
      • Couldn't agree more, Art. Why does it have to be all or nothing? Why not buy 90% shares and issue 10% in dividends when the pps is so far below nav. That would be approx a nickle per share per quarter for a dividend at the current repurchase rate, or 20 cents per share per year. That would be a huge help for people needing a div and a sign that management has divs on their mind, not just their stock ATM. It would put some support under the share price and help drive it to nav faster. They are spending approx 1.7 per share annualized on stock repurchases and 0 on divs, it wouldn't matter that much to spend 1.5 on repurchase and 0.2 on divs, but it would help out those of us retired and stabilize the pps IMO.

 
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