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Linn Energy, LLC Message Board

  • markkanegis markkanegis Jul 8, 2010 7:13 PM Flag

    Divy question

    Have held this great company for about a year, and keep adding. Truly enjoy owning this company.

    Noticed the div yield % fluctuates a bit from 10 to 9.5 when the stock goes up. Doesn't seem like a big deal, but just wondering if that's the golden rule, and will it continue if the share price goes higher?


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      "prevailing rate of returm" and "lock-in rate of return". GREAT TERMS IN THE CLASSROOM. NO GOOD IN THE "REAL" WORLD, PAL.......

    • jackhiller Jul 12, 2010 1:57 PM Flag

      There simply is a bit of ambiguity whent the question is phrased without sufficient context to indicate if the yeild referencesd the current market price or the historic purchase price.

      No need to get upset over the ambiguity in natural language (one of my former research topics)

      Best of luck with Linn.

    • That is only if you are buying at today's price.
      If you already own it, your yield is based on your own individual cost basis. Your yield does not change unless the company changes the distribution amount (which I don't expect any time soon).

      • 1 Reply to lizahuang54321
      • Liza,

        Yield is not based on basis cost. It is based on current market price.

        IE: If you purchase 100 shares at $10, (an investment of $1000) and the stock is paying 10% ($1/share) and next year the price of a share goes to $20/share and the stock still pays only $1/share dividend, the yeild is now only 5%.

        The reason for this is that you could sell your 100 shares at the current price of $20 (a total of $2000). You could then take the $2000 and purchase a different stock that is paying 10%.

        What I am saying is you can't base yield on your basis cost, it must be based on the current selling price because that is the actual value of your investment at any given point in time.

    • linn pays $2.52 per unit per year.
      If say, the share price doubles
      the % of pay out is cut in half. Or if
      the share price is cut in half the % of
      pay out doubles. Either way, it pays $2.52

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