It seems like a pretty good idea to double check anything that is posted on the Yahoo financial board. Currently, RNP pays $1.10 for the past twelve months which is a return of over 7%. The Yahoo page shows the dividend as $0.79 and only 5% return.
If interest rates go up, I am hoping that the RNP price increases accordingly. After all, the price was $29 when the interest rates were higher. Does this make sense?
<If interest rates go up, I am hoping that the RNP price increases accordingly.> The preferreds will drop in value with a rise in rates especially those near and above par. I would expect management to sell pfs and buy dividend growing REIT common as rates increase.
No it does not make sense. If interest rates go up the market typically swoons and RNP will swoon with the market. Interest costs for companies in the RNP portfolio will increase & that will adversely affect their bottom line (although most should really be in pretty good shape for at least a couple of years - it will adversely affect new deals), this will affect each company’s valuation so the RNP portfolio will take a hit. Finally, and perhaps most important, Cohen & Steers are financing the leverage portion of RNP w debt as a result of the ARPS fiasco; if rates go up the costs of RNP debt will go up, to some extent, and adversely affect RNPs bottom line.