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Sun Communities Inc. Message Board

  • dar200 dar200 Sep 3, 2013 1:40 PM Flag

    6% enough for me

    63 cents per Q is 6% at a cost of 42. Good enough for another 1,000 flippers at 41.986.

    This year's tax status will be interesting since preferred carries out taxable income first. I was surprised at how low the 2012 return of capital portion was. With more depreciation this year and preferred taxable first, I expect a higher percentage of roc this year, I hope substantially higher.

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    • Out at 43.51 (netting 43.501) for 3.6% in 3 trading days. Another 1,500 for the Christmas fund.

    • Dar,
      What is your view of SUI common vs. the SUI PA. For me the benefits of better capital gains offered at current price of the common is outweighed by the presumed security and somewhat higher yield of the preferred. I am thinking of increasing my position of SUI but just realized that the preferred is has a current yield of around 7.3% vs around 6% for the common. Anyone else have any comments please feel free. GLL


      Sentiment: Buy

      • 1 Reply to kenpalley2000
      • Depends on your stomach for volatility and time frame. Yeah, you get more yield today but that dividend will never go up. Eventually, inflation and taxes will erode the purchasing power of that yield.
        Plus, you have very little upside on the price. For a long, long term hold, I would not buy preferred near par.

        I loved buying NRF pfd A at a weighted average cost of 6.99 when the yield was 31% and the upside was a factor of more than 3. I would not touch it today with a 10-ft pole near par.

        With companies as small as SUI and NRF, I view the company risk for either class of stock as almost the same, especially with the respective CEOs. If Shiffman or Hamo are going down, they will go down in flames because both will throw Hail Marys to save the ship.

        Nevertheless, if the belly is so weak that common causes ulcers, then preferred is like Pepto Bismol, trading upside for sleep.

    • It's ok if we go a little lower because I'm still sitting on my dividend money from this quarter.

      • 1 Reply to suntrader2
      • About a decade ago, SUI traded at a 6.5% yield (mid to high 30s). Interest rates are much lower now, so 6% seems pretty reasonable - in the current environment. The real question is what is going to happen to the environment? A return to normalized interest rates? A repeat of the Japanese experience?

        Dar is pretty good at flipping, as posted in real time. I suspect this will be a profitable flip. However, I also believe we are likely to have another structural wave of selling of things with yield.

78.13-0.12(-0.15%)Oct 26 4:02 PMEDT