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Cohen & Steers Reit and Preferr Message Board

  • mysonchino mysonchino Mar 14, 2008 3:33 PM Flag

    RNP Portfolio and dividends

    Remember, RNP is over 50% invested in preferreds. All preferreds are down but continue to pay their dividend. RNP pays about 35% of its dividend as a return of capital so in a year it reduces a more or less 20.00 stock by .80. If you believe that realestate will appreciate 3 to 4 % a year as rents increase 3 to 4 % a year there is no need to worry about a return of capital. Also the NAV for RNP is about 15 to 18% below market value of the actual real estate at Dec 31, 2007. RNP has always paid a return of capital component in their dividend and capital gainns as well that if reinvested increased the dividend. So, yes, the dividend is working for me just fine. If it continues for the forseeable future rather than being increased as it has the past few Aprils I will be very happy. Be patient. Buy assets that can appreciate that pay you to be patient and relax.

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    • You make some good points. However, I think there is a statistic that needs to be updated, the statement about NAV being below market value Dec. 31, 2007. The March 10, 2008 issue of Barron's indicates that RNP is selling at a 5.1% discount to NAV [NAV: $20.03; market: $19.00]. I don't ever remember seeing RNP selling at a premium to NAV, and I would not recommend paying a premium for any fund. 15% to 18% below market value is tremendous. Are you certain you are quoting your source correctly?

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