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ARMOUR Residential REIT, Inc. Message Board

  • legionfullmetal7 legionfullmetal7 Sep 19, 2013 10:27 PM Flag

    What investors should be concerned about is Risk.

    Is the risk of making 5 cents a month worth the risk of losing 25 cents in a month or over a dollar in a year. See there is cannibalism going on here... this company put out Preferred that are eating away at the dividend of the common stock. The problem is the common stock is the last on the list, it would not surprise me if the dividend fell even further... Hey guys these are no cheap preferred they are paying about 8% and near the top of the food chain. I can understand the risk on higher returns but not on a 14% return. Now, investors have to push the stock back down to the risk ratio that would entice investors to return. There are a lot of stocks paying around 14% that would have less risk. That is why I am buying the Preferred and put a DRIP on the common shares since I have bought the Preferred I have gained almost a dollar on the stock appreciation and this will be my 2nd month of .17 a share. But, I also look at the protection, my dividend is a lot safer than a common stock and in 2017, I am looking forward to a call of the shares. We take $25 and divide it by .17 = 147 months of dividends to equal the opening price... 147 divided by 12 =12.25 years to make your money back on the stock. So, in 12 years and 3 months this Preferred would have paid for itself no matter what. But, the sweet part is this stock is callable in 2017 so you are looking at 48 months x .17 = 8.16 plus you get your money back if the shares are called. So if you have a 1,000 shares you in 4 years you have a good chance to receive all your money back when the stock is called = $25,000 plus $8,160 in dividends... So in 4 years you could make a profit of $8160.00 and that if you bought at $25 per share... I did not I bought around $22 per share... but as you can see the risk is much lighter.

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