I don't care what kind of dividend it pays or what kind of resolve one has, it is very HARD to buy a stock that has large leverage and a chart that looks like this:
To me, it is risk. What good is the large dividend if your value declines 40%?
What good is the large dividend if your value declines 40%.
DRIP; dividend reinvestment program. That large dividend is being reinvested at that 40% decline.
RNP isn't invested in cheap crap like IMH, NFI, or AHM(now bankrupt). Go to google finance for RNP and click on the SEC fillings. There you will find RNP's most recent holdings, filed at least quarterly.
If you don't like risk what are you doing in the market?
Their is risk in CD's at your local bank, if you have cash in a CD paying 5% or 6% and now closer to 4% you have lost close to 10% of the buying power of that cash because of inflation(the 2% to 4% inflation reported by the government is way off).
RNP is a preferred stock fund. The dividend will be paid at the rate of the preferred stock, 6%, 7%, 8%. The preferred stock price may be down but the payout is fixed, and in most cases is callable or redeemed at a fixed price.
RNP is trading at a 10% discount to NAV and many of their preferred shares are trading at a discount to their redemtion value.
If you're a short term trader stay away from REIT's, banks and homebuilders. But long term investors will do good buying the blue chips of these beaten down sectors.
REITS had a great run for many years and now they have given some of it back. In my opinion many reits look to be much better deals today than say a year ago. Rents will rise over time and thus the cashflow they are able to pass along to shareholders will go up. I feel even better about the other half of RNP's holdings. Just a few months ago investors were willing to accept an 8% yield on pref stocks and today investors want several points higher just because of fear as best as I can tell. Give it a little time and folks will calm down and get greedy again and start reaching for those higher yields. Once yields come down again we should see some capital gains on our pref/debt portfolio. I don't expect to get rich over night in RNP but I have been buying and if it stays where it is or heads further south I will probably add some more. Just my thoughts. Good Luck to all
No doubt all financials are tarred with same brush by the "Short", which is really too bad to have such negativity amongst the investment community. For us older folks who really do need income it's sad to see the price being driven down to unacceptable levels by the shorties! With the projected year end capital gains distribution we have a roughly 21% yield. Will buy more on Monday at these fire sale prices with the steady income its a no brainer.
RNP and couple other Cohen & Steers funds are down along with a number of financials, however they recently increased the monthly distribution and a possible $1.75-$2.35 cap gain coming in January. Have held RNP for 4 years and added more in low $20.00 a couple weeks ago. It will come back for sure, but the nice thing is you get paid for waiting. Think about this-I sold RMH and RSF at $16.00 over a year ago when I read there would be no cap gain distribution for 2006. Both of these are trading at $5.00 now with a NAV of about the same. CNS is up a tad today so I would not worry about current price. Too many folks sell losers prematurely! This is not a loser!