December dividend will be only .05 to bring payout into line with earnings. Starting January dividend rate will be only .0833 that is about a 14% reduction. Earnings for the quarter were only .24 with (.02) realized loss. Last year was .27 with a .06 GAIN. This way below expectations.
The new dividend rate is below even the .085 I projected in an earlier post which was ridiculed by many. This cut IS NOT discounted in the stock price. Time will tell if my price projection of $7 to $8 dollars will be met.
FSC continues to be a value trap. There might be a trade here at the right price but time will tell. NOT a long term investment.
Current earnings only cover 92% of dividend. FSC WILL NOT pay a dividend that involves a return of capital due to the high institutional ownership. Look for another cut next quarter to about .085 per month.
Look to buy at $7 to $8 per share after the cut.