BEFORE an ajustment takes place,meaning a drop of course? Ive read most of the oppinions here tonight,and I have mixed and needless to say confused emotions about buying in from the sale of my phk for the obvious gain in div.'s. But I'M LEARLY OF MY DISCISSION NOW. wHO THINKS WE CAN HOLD THE CURRENT DIV. TILL NEXT YEAR ,AND IF NOT WHY? TIA jIM
I think the divvy is sustainable and eventually will be increased. Dividends in REIT's are 90% of taxable income, by law. CIM has a good investment strategy, and a good income.
Dividends will go up, if the RMBS investment strategy earns more, or down if it earns less. It really isn't rocket science. The good news is that they are a vulture investor, buying something that is currently undervalued by the risk-averse investment market ... at a steep discount. The risky part is that all that RMBS paper could end up hurt by a prolonged recession.
I agree. I was extremely happy with CIM buying up all the low-priced paper after their last stock issue. The big jump in revenue easily matched the earnings spread across the new shares. Hopefully something very similar will occur after this last stock sale. IMO this broader revenue base will see less earnings fluctuations and much positive capital growth when the housing market eventually turns.