Hey Dar and other NFR number cruchers, is there a possibility or NRF having to issue a special year end dividend if their regular dividends for the year don't exceed the 90% of net income rule? Since we're still in the last quarter (unless there's a fiscal year issue), can anyone (after tomorrow's earnings) project an income for the full year to see if this may be a possibility? Wouldn't THAT be short crusher!
They don't have to distribute 90% of taxable income ... no one comes and drags you off to jail if you don't make the distribution. There is an excise tax penalty if you don't make the distribution, however. This can happen if management wants to keep distributions steady, but aren't sure that they will earn the income so they retain some money just in case, and pay the tax penalty. This has happened to MREIT's already [like AGNC] that want steady dividends, but have somewhat volatile earnings. Not likely with NRF, but I had a minute so I thought I would point it out.
It's 90% of taxable income, not net income. Quarterly financials don't give a clue about taxable income. Plus, the first three dividends of 2014 can be considered distributions of 2013 taxable income. There will be no pressure to distribute by the taxable income rule.
If there is going to be a special dividend with respect to 2013 it will be announced in Feb, imo, maybe about 5 cents. Such a dividend would not shock me because it's more conservative than getting the market expecting 2 cents per quarter increase which goes on until a preannouncement of a change in policy.
I think Hamo is thinking about doing something with the dividend to wake up this stultified market, but have not settled on anything in my mind. An alternative is to go to 25 cents in Feb and announce that future increases would be made annually (thus getting off the penny per quarter horse).
Any surprise over penny per quarter is just fine with me since I just bought another 3,093 shares (cause that's all the cash I had in an IRA).
Thanks Dar! It would be nice if there is a special dividend, Hamo would announce it on the best day/time of day to screw as many shorts as possible! Maybe a Friday afternoon once the after hours trading session ends? That way they will have all weekend to think about it!