in light of the SPO, that will raise approx $45MM, please keep perspective in mind:
SPO issued at 109% BV, accretive
forward pipeline $250,000
bulk of new funds should be deployed in 90 days
RSO is embracing a long term BV increasing strategy
Div raises are great but only if they are seen as secure by the market, ie a div that is covered (the more comfortable the better) is more valuable than one that is seen getting cut.
This was a good SPO for RSO, accretive with places to invest the money
The long term story with RSO keeps getting better!
Thanks for setting forth those facts and insights. I completely agree and believe a raise should only be done if they expect continued eps (AFFO) as good or better than the recent report. Doing this SO suggests they have good, worthwhile, investment opportunities. Of course they may want to wait till they have another good Q before raising the div.
I spent some time on the phone with IR....basically...........the spo was accretive to book value immediately, approx 1/2 of the capital raised is already spoken for by their investment team, and the other 1/2 is in process of being allocated for investing out......Good raise, love their strategy of increasing BV, slowly increasing div (best long term plan to provide long term value) (if you define value as I do: a growing yield on cost, a favorable payout ratio, a solid, sustainable and slowly growing div, and a growing book value) these things are what build a floor on share price and the floor is getting stronger, plus true long term value in any div stock is the ability to collect the div with a reduced risk of losing the capital invested to get it (or even possibly increase the value of that capital), this is what RSO is doing, thumbs up to the more conservative, long term strategy!