The divy was suspended in order to maintain their "A" rating before the closure of any HW transaction. They had problems before any transaction took place. I'm sure the rating agencies would have relooked at the ratings after final transaction details were finalized.
I believe the divy is suspended which is why Mr. Braun changed the language in the last press release.
"...We continue to expect operating margin improvement for the next several quarters, which is anticipated to contribute to growth in the Company's book value for the benefit of our shareholders."
They could have cared less about book value in the past, or else they would have been buying back shares a year ago. They previously always discussed shareholder return because Management and the board always liked to focus on the dividend that were being paid. They needed an excuse for the falling share price and the lack of a share buyback. Shareholders were supposed to think of it at total return, dividends plus share price. The change to book value is on purpose. No dividends theoretically increases book value since that is capital that you were previously paying out. This assumes that the company is making money, or else book value will continue to be eroded. The problem I see is I can't imagine them making money for at least two quarters, if that. And then, it's a gamble on the insurance rates.
I've waited patiently for Management to turn this thing around for a couple of years, but waiting time is over. It's time to put this company on the auction block.
I believe that the divy would be suspended for 2qtrs because of the potential to buy HW. Now that the deal is over (no purchase). There is no reason to suspend the Divy...
Just My take on things,
Good Point. In the press release it says the "Company" will suspend dividends, and the "Company" is defined earlier as the parent company. So, I take it as the parent. Note though that it is 2 quarters of underwriting profitable, not necessarily profitability for the comapany as a whole.
....Pursuant to the terms provided by the Florida OIR, the Company will temporarily suspend future dividends as a result of the Surplus Note until FNIC has reported two consecutive quarters of underwriting profitability. The complete terms of this capital infusion are currently under discussion with the Florida OIR.....
21st Century Holding Company ("The Company")
That's because they had already declared the $.06 June 1 dividend on March 3 before they had their ratings issue.
Read paragraph 3 of the April 5 release:
They can't dividend until there are two consecutive quarters of underwriting profitability. TCHC has never explained whether the dividend restriction is on FNIC or the parent.
This is not a good stock for a beginner. The dividend should be discontinued right now. Look at the press releases in March. They had to discontinue dividends from the subsidiary to get agreement from FL to recapitalize and maintain their "A" rating. They have to have two quarters of writing profitable business before they can restart dividending money back to the parent. They should give an update next week. They haven't officially stated that all dividends are discontinued yet.
If you buy this stock now, you are BETTING that the Board wakes up one morning, realizes they are incompetent, and sells this company before more book value is destroyed. That's it.
Welcome to this MB Kate! With the information we have, I would say yes this is still a good buy. I would also suggest that you look at CLMT which is paying a Q divy of .455 per unit.
This isnt too busy of a message board at times however...
GL with the investing,
Disclosure: I own Tchc and Clmt
If you folks like insurance stocks that trade at a discount to book. EIHI is another great one. It has move a bit recently but still trades at 70% of book. They recently announced the sale of a division raising $33M in cash, they are very committed to a stock buy back that is taking place currently. I own both TCHC and EIHI. EIHI is also paying a current dividend.