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Eaton Vance Tax-Managed Diversi Message Board

  • thezocman Jan 22, 2013 9:46 AM Flag


    What is going on with these people! When I bought into this company, dividends were .46 cents a share. It has decreased every year and now is down to .08 cents a share. Looks like it is time to dump the thousands of shares I have been holding. Thought this company was a safe investment!

    Sentiment: Sell

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    • Don't worry. Your investment will soon return to it's former glory. Management is currently engaged in intense negations with Leprechauns to produce 100 bags of gold per quarter.

    • With Respect; ETY just turned in a solid, if unspectacular, performance with y-charts showing a trailing one-year Total return of + 19% ....
      The fund started out at $20 per share with a 10% dividend paid out quarterly ...and is now priced about $9.88 per share with an approximate 10% annual dividend paid out monthly.
      Since inception, the fund has paid out $9.40 in dividend distributions plus the $0.08 per share you will get this month ..and if you have been reinvesting those dividends ( like most shareholders ), you have literally hundreds of shares purchased at various prices but most of which are below $10 per share ...making your adjusted / overall cost of purchase much lower than the starting $20 amount.

      Here is a telling question : Do you have MORE money TODAY invested in ETY and assuming reinvested dividends from inception than when you started ? Answer is an emphatic YES.

      This is true despite the general market losing 58% of value in the recent market recession and with the general market price of ETY dropping to $5.88 by March 2009; you have posted a + 5.10% holding period rate of return on your initial investment.

      While a + 5.10% rate of return may not be great or wonderful ...its " beats-the-socks" off simply losing money ....

      But that decribes the past history of ETY; a better question might be : What will the fund do for me in 2013 ? Answer:

      1. Pay out an estimated $1.00 per share in dividend distribution on a $9.88 market price today.

      2. Taxation on approximately $0.10-0.15 of the dollar per share recieved superb tax efficiency on the high income taken in.

      3. Shares are trading with a 12-14% discount to NAV built in right now ...making it a compelling valuation to own.

      4. Fund has 121 blue chip type stocks in the portfolio ....Apple / Exxon / Google / Pepsi ....and represents a nice composite of the best run companies in America and with 25% International, some of the best companies in the world.

      5. ETY fund management is aggressively buying back shares in the open market each month ...trying to reduce the large discount to NAV and with a goal of reducing the total shares in the open market by about 10% ...this should help shore up the market price.

      6. By switching to a monthly dividend, the fund has reduced the incentive for big day-traders to swoop in and buy-the-dividend just before the x-date ...then dump the shares a few days or weeks later ..this was a real problem for long term holders of the fund in the past ...who were " whip-sawed" by the sudden and unexplained market price moves around the dividend dates.

      7. The fund OWNS no debt or bonds ....which I believe will be a huge positive as much of the so-called bond market is racked by interest rates that MUST rise form zero or near zero the short term future.

      Ok ...( whew ) hope this helps explain the thesis to HOLD the shares ...another year at least .

      Regards - mike

      Sentiment: Hold

11.69-0.01(-0.05%)Sep 19 4:06 PMEDT

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