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Fifth Street Finance Corp. Message Board

  • qnbrbr qnbrbr Dec 29, 2010 1:40 PM Flag


    Just some thoughts for those of you who tend to try to capture dividend in FSC and other high divy monthly payers.

    For longs you might look at this mid Jan and Feb for good buy points.

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    • <Maybe the info is wrong? Go to:
      and then go down to Earnings per share, underneath the graph, and it shows -.24 per share.>

      If there is one thing I learn on these boards, it is NEVER EVER really on GOOG, Yahoo or any other portal that is fed financial information by a third party. Always, always go to the source - ie the company's web site and financial releases.

      Below are ARR's last 2 earnings releases. Both reports essentially say the same thing: while the GAAP loss was negligible ($500,000 or 5cents per share) due to non cash interest rates swap marks, REIT taxable income (the basis for the dividend) was in the 36cens - 40cents range.

    • Maybe the info is wrong? Go to:
      and then go down to Earnings per share, underneath the graph, and it shows -.24 per share.

    • That's one of the advantages of higher-yielding stocks: If someone is underwater for awhile in one of those stocks, there's the dividend which goes right into the stockholder's pocket.

    • <ARR is operating at a loss>

      Huh??? Where are you getting that info? You may be referring to the NON CASH mark to market values of their interest rate hedges which resulted in a nominal ($500,000) loss in 3Q. For a company like ARR you cannot look at non cash marks and GAAP earnings; you have to look at REIT or core earnings which was 36c in 3Q and 40cents in 2Q. With the yield curve getting steeper and given their recent capital raise, they may have an opportunity to increase margins, at least in the short term. ARR's major challenge will occur when short term rates (their primary cost of funds) start to increase.

    • TCAP is a BDC that has a high beta so thats wings there can be used for cap gains. And if you get 'stuck' in it for a while, it will pay you handsomely to hold it - 9% right now. Look for buys in the 18-19 range and sell in the high 19s - 20.

      One caution - low volume.

    • Thaddeus - Excellent recommendation in PSEC!

      I particularly like that it is traded as a stock instead of a fund, where it shows it's financials.

      Since I normally do one big (for me) chunk at a time, ARR is operating at a loss, which concerns me a bit; ERF has a P/E ratio of over 44 compared to the P/E ration of PSEC of just over 15.

      So, I've got almost 5,700 shares of FSC right now, and am making $569.30 for every .10 it goes up between now and ex-div date of 1/28. So, I will monitor the stock carefully and maybe sell before it's dividend date in order to buy PSEC by Jan 28.

      If it works, I will avoid the expected price drop in FSC after the ex-div date, and pick up the dividend for PSEC, which has been doing monthly dividends without much of a price drop.

      Then, I'll probably go after RDS.A for their dividend with ex-d on 2/6, and then get ready for CVX by 2/14.

      This is my first attempt at this close buy/sell of dividend stocks. Only time will tell if it works out the way I'm planning, or not. It all depends on price drops after the dividend, which would eat up too much of the dividend earned. : ^ )


    • <BGY (Black Rock International - Yields about 13%) and ARR (Armour REIT - Yields about 18%) are among the most popular that I've seen on these boards. GL to you.>

      Correction to this post: BGY DOES NOT PAY MONTHLY; IT PAYS QUARTERLY. I was conflating BGY with PSEC, a monthly paying BDC which I also own. Sorry for the confusion.

    • kidshelleen51 Jan 15, 2011 7:16 AM Flag

      My biggest holding is NCZ, it's been good to me since I got in around May 09. It earns the div every month and has paid out a special in Dec the last two years. It's sister fund NCV is also good. I've got a little bit in HIX and moved into FSC and ARR recently. I also own GABUX and since bonds got pounded in Dec, I took a small position in PPT. Quarterly payers I still hold and intend to keep are RSO and EVEP.

    • PSEC also.

    • Those are great yields! Thanks. I will look into them more closely.

      Here's ones that I have found, but all are lower (8.2% to 9.4%) returns: ERF, RIT, MMT, and CHI.

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