Although financials are improving for HOV, I have some serious doubts about HOVNP at the current price level of over 50 cents on the dollar. The dividend is non-cumulative and I don't see much incentive for management to resume paying it. I do wish I had held that Jan effect trade longer when I picked it up near the end of 2011 trading around $1.50 / share though.
Aside from the non-cumulative dividend, HOV is a family controlled builder and they may not want to pay a dividend on the common stock for several years anyway. HOVNP gets 2 "advisory directors". This is really weak. Advisory directors don't get to actually vote. They don't even get to attend the whole board meeting - just the part where non payment of the preferred dividends is discussed. After that they get kicked out (perhaps the real Directors send them for coffee).
I do a newsletter on distressed preferred and debt issues. HOVNP is modeled in excel in case you want to calculate an IRR by guessing how many more quarters they will leave the dividend suspended for. There are many better issues you should consider instead of HOVNP. In fact I have HOVNP in my "Hall of Shame" on account of the Advisory Directors.
Email me at my yahoo email which is mrpanick if you'd like a copy of the newsletter and excel models to preview.
You may want to read the prospectus. They can't pay a dividend on the common unless they pay the preferred dividend. That's pretty much about it. Who knows if they actually plan to pay a common dividend anyway? Perhaps they might prefer to spend 5 or 10 years improving the balance sheet or growing the business, before paying a common stock dividend.
There are no other "criteria" specified in the prospectus that I can find which would require them to resume a dividend. They could resume a dividend a year after they turn profitable or 5 years or 10 years. Perhaps they will act in "good faith" and restore the dividend promptly as soon as they can. Perhaps they won't. It certainly doesn't help that the preferred is only represented by "Advisory Directors" with no vote.