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Natural Resource Partners LP Message Board

  • christmile christmile Feb 21, 2014 11:44 AM Flag

    9.27% dividend yield at this price

    Think of it as a new investment, which is technically what it is, regardless of whether or not you bought shares earlier.

    Sentiment: Strong Buy

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    • On January 22, when NRP closed at $ 15.78, you posted that NRP had a "8.9% dividend yield". On January 28, when it closed at $ 15.43, you posted that NRP had a "9.11% dividend yield at current price". Now, as you point out the yield is 9.27% (actually closer to 9.4% as I write). In each case, you were right, but it hasn't helped NRP. If things don't change, you will get the chance to post about NRP's new 10% yield before too long.

      The only things that might help NRP, at least temporarily, would be an announcement of a non-coal acquisition (although financing costs would be a problem) or some miracle in the steel industry that helps met coal pricing and volume. I don't think the miracle is coming any time soon, and I have problems believing that NRP could finance any significant acquisition attractively.


    • Except that people who bought this security in April 2013 are now carrying about a $9 loss per unit. So for them, it's not really a "new" investment; it's a sucking chest wound in their portfolios. (Talk to "Askew" about that...)

      Following a damaged security down, down, down -- thinking all the while that "it's got to turn around soon" -- is one of the quickest ways to lose money.

      As to the 9.27% distribution yield, NRP is paying 9.125% on their senior notes -- which are arguably more secure than their common units. Why is it a good idea to accept *only* 9.27% yield on the common units?

    • Good thought, except that BEFORE May they will cut the dividend once again to somewhere between $0.15-0.20. And more cuts next quarter, when the PPS will be in single digits.
      This LP is in insolvency as far as I am concerned - and there is only way out of it - BK.

      Sentiment: Strong Sell

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