DNP had their IPO in January 1987 and for most of that time since, they have traded over NAV. Probably over 99.5% of the time. Investors perceive DNP as a "save haven" and bid the stock up in times of stress. During the market melt down in 2008-9 when DNP traded down to the high $4-low $5 area it was trading at about a 45% premium to NAV. Those that stuck to their investment drip were well rewarded with large amounts of dripped shares because DNP never waivered and paid the $0.65 per share per month and even gave the shares at 95% of the share trading price.as they have been doing for the past 18+ years each and every month without fail. Before that they paid $0.06 per month for about 10 or 11 years. For the (There policy is to give a discount of up to 5% if DNP trades above a 5% premium. Anyone that bought 100 shares at the IPO in 1987 and had reinvested all the dividends from the beginning would have about 1150 shares today. I have a small position in DNP due to the premium, for about 2 years.
I also have a much larger position in GAB that trades at a 7.39 discount to NAV that also has been around since Jan 1988. 100 shares bought at the IPO with all the dividends dripped would give you over 4500 shares as of the June 2015 payment. The Sept $0.15 quarterly dividend has been announced and GAB will trade X-Div on Sept 14, 2015
Arbtrdr: Have you read the S-4 filings by MWE and MPLX? And the follow up by Credit Suece. I'm talking about WHY FRANK SEMPLE WENT LOOKING FOR A MERGER PARTNER AND THE OTHER TWO OFFERS THAT WERE ON THE TABLE? Mr Semple knows more about MWE and the capabilities of MWE than anyone else. He always has. And he always will. And everyone on this message board for the PAST THIRTEEN YEARS has benn always complaining at whatever He proposed. If they sold debt--They paid too much-If the sold units they sold them too cheap. If they took a partner in a JV they gave away too much. Everybody conveniently forgets in 2008-9 with the financial markets frozen solid with no money available and MWE unit price down to $6.69 a unit with MWE yielding 39+% Frank semple found EMG and made a JV with MWE owning 60% in the Marcellus and EMG put up about the first $1B . Without that JV with EMG there would be no MWE today. Frank Semple is a leader with foresight. He sees 2-5 years ahead of everyone else.
I'm not wearing rose-colored glasses. You should read the S-4 SEC filings. And then read it again, This time read between the lines. Then you will see the position MWE is in. Would you prefer a taxable transaction with a C-corp so you can pay 50%-60% in taxes. Then go find an investment that you can invest the 40% cash you have remaining that will give you more than MPLX.
And regarding guanties---If you want a guaranty, I would suggest you buy a Washing Machine
The irrational selling at these levels allows those that have done their homework the ability to buy undervalued assets that will crank out cash for many years to come.
This could be the opportunity of a decade. I have been adding at these levels on a daily basis.
You don't make money---wondering. You might make money --#$%$. There is enough turmoil going on they might just do the trade and eat it.
You never know till you start fighting.
I use distributions to pay all my expenses in retirement. I told you to read the S-4 that MWE and MPLX filed with the SEC in the last few days. Obviously you are not interested in whats going on with MWE. Times have changed and you don't seem to be interested in finding out what to do.
Sorry finepilsner the only money that's yours is the $0.92 you just received. The $0.93 has not been declared by management yet.
+++ Third, the distributions over the next 4 years will be about $4.00 short of what they would have been just by staying w/MWE+++
It appears you haven't read the S-4 SEC filing filed by MWE and MPLX. It appears there were 2 other offers at lower prices at least one of which was a taxable transaction that would have not been good for MWE long term investors. The MAJOR PROBLEM appears that MWE would not not able to continue with the increased distributions and their customers needed more infrastructure faster than MWE was able to deliver. The chances are the distributions in 4 years will not be $4.00 short because we don't know what MWE would be able to pay over that time. In addition you don't know what the MWE unit price would be without this deal and a lower distribution level. The MWE price is currently 25% below the all time high due to this deal. There are many companies in the oil and gas business that would give their right arm to be down only 25% from their all time high. Get the facts and put something on the message board other than the whining I've heard from you and others. Serious discussions are welcome.
Hi Cassmore and others in the unhappy camp:
There was a preliminary S-4 Filing with the SEC. Moneyonomics posted parts of it on the Investor Village MLPs board Post # 53867. Good reading- There was another bidder at a lower price. The need for funds to satisfy the exponentially growing need for infrastructure and the declining MWE unit price were all parts of the equation.
In fact MWE in the last few days announced a new JV with EMG for additional infrastructure in the Utica and I recently saw an announcement that MWE has identified $6B to $9B in additional project over the next few years. There was they could have done everything that was needed and support the growing distributions going forward. This merger appears to be the best way AT THIS TIME UNDER THE CURRENT MARKET CONDITIONS for the MWE unitholders to continue in the growth over the next 10 20 to 50 years.
We will be in stronger hands while others will fall by the wayside.
Read the S-4 filing and then talk.
++++I noticed that you left the fact that MWE unitholders will see their distributions cut in half out of your analysis.++++
No I didn't Reinvesting The $3.37 front loaded payment and the $0.92 just received and the $0.93 payment due in Nov 2015 will give you almost 10% additional units plus the 9% additional inits received will give you about 19% more units cranking out a higher dividend increase 25% a year for 2 years and then 20% a year the next 2 years. MWE guided you for 7% increase in 2016 and then 10% per year for 4 years.
Dripping the rest of the 2015 payments as I said would give the following returns to MWE investors
2019 + 26.3
the MWE investors will be ahead upon receiving the Feb 2020 distribution and it will be acceleratinh at a much higher rate than the stand alone MWE
And that MWE unitholders will forfeit the IDR's they paid so dearly for.++++
All the growth we have had since 2009 have been added into our unit totals due to the IDR's we are getting paid for them and the distributions we will be receiving will be in addition. For those that find this a problem --Invest the $5.22 received this year in MPC and be on the receiving end of the IDR's
Or do nothing but complain. That's a stratedgy also.
Bad mouthing me will not make you money. But bad mouthing MWE and the announced merger will keep the price low for me to buy in cheaply and make money
Friday 8/14/2015 MWE paid $0.92 cash On Nov 15 they will pay $0.93 cash. At the merger in December (under current terms) Unitholders will receive $3.37 cash per unit.
$0.92 + $0.93 + $3.37 = $5.22 or 9.265% between now and before the end of the year That $5.22 if dripped into additional units will give you 9.265 additional units Plus on the merger you will receive 1.09 units for every 1 MWE unit or another 9% additional units Totaling approximately 18% more units than currently held in MPLX which is guiding to grow their distribution 25% in 2016 and 2017 and then 20% in 2018 and 2019.
All monies dripped from Friday's distribution will bulk up the unit count for the Nov 2015 distribution AND THEY WILL BE ELIGIBLE FOR THE $3.37 merger payment plus the 9% additional units at the merger (1.09 for 1)
I believe opportunity is here if you look for it and take advantage of it .
Hi Milluzzi: If you are buying you aren't missing anything here If you truly believe what you wrote than you should be buying shares while they are being given away instead of worrying as to what you are missing. I have been buying in the past two weeks and I am dripping the dividends to bulk up the share count. Its a perfect time to unload any junk you have sitting in your portfolio and adding to GAB with its 10+% dividend
Sir John Templeton said it right many years ago "FEAR CREATES OPPORTUNITY"
If you are eating Catfood- I doubt if you will be interested in "The Best Catfood" I would suggest you buy the one selling for the cheapest price because you will need to stretch your money until the next SS check arrives and some of those month can be pretty long when they have 31 days in them.
I remember maybe 40 or 50 years ago when The Fed only raised the SS payments a very minor amount and one the TV channels in St Petersberg Florida decided to interview some old retirees on how they were doing with their SS checks and the small increase. They interviewed one elderly gent that was probably younger than I am today who replied --
"After I pay my rent and utilities and for medications I have $60 left for food. It costs me $2.00 a day for food --so I am alright except for the months that have 31 days"
Very sad to watch---- I remember the hollow look in his eyes to this day. That man was dead and those that watched knew it, even if he didn't.
So please---Don't make jokes--
"FEAR CREATES OPPORTUNITY"----Sir John Templeton
What you do with that opportunity will decide whether you will eat cat food or caviar in your retirement years.
====55.13 is very close to 55.07 - so they are trading at parity????====
At the moment --Yes.
But-That's history- I'm asking about what is the future for Long Term MWE unitholders that have very large gains built in over many years in addition to a lowered adjusted tax basis to virtually ZERO
In the next 6 months, In addition to the $3.37 which is about 6.1% based on today's closing price We should also get a $0.93 distribution on Nov 15 if the merger isn't closed or $0.5123 ($0.47 X 1.09= $0.5123) if the merger is completed and $0.545 in Feb 15.
Plus the 1.09 MPLX exchange for the 1 MWE unit now held (That's 9%)
MWE just went X-div on Tuesday so $0.92 per unit is already on the way from the units we now own
If all that money was recycled into MPLX units the distributions going forward would cover the bulk of the current MWE distributions and be growing at a higher than double the current MWE rate.
Another point to consider---Where would MWE be trading these past few weeks If Frank Semple hadn't announced the merger when he did.
What are MWE future prospects with the merger?
What are MWE future prospects WITHOUT the merger?
According to Value Line GAB had $3.63 worth of unrealized appreciation per share. That would be 59.6% of the current value of GAB shares if all the numbers were the same as at year end.
=====if semple selling im selling.
thats my thinking.======
I don't think semple is selling. I think he is repositioning MWE and the MWE growth that goes with it ---for the long haul that he now know's couldn't be done on its own. It appears he picked MPC and MPLX because they were big enough to take MWE on the next leg of the journey while they were small enough to make MWE be an important part of MPC's growth going forward.
This transaction guarantees MWE unitholders that want to continue cranking out even larger growth of distributions going forward the ability to do so. We also have a newGP (MPC) that will probably grow even faster than MPLX or MWE. Their disclosure of a 28% dividend increase today ( Before any input from MWE) leads me to believe MPC will be a huge growth vehicle going forward, probably even more than MPLX.
I see MPLX as a growth vehicle for MWE long term money currently tied up in a taxable account due to a low or zero adjusted cost basis.
For new money (the $3.37 cash or equivalent) or other could be used to buy MPC in a tax advantaged account because it looks like they will be tossing off increasing chunks of money in years going forward
Good luck to you dreiser. Its been a pleasure chatting with you from time to time.
Phil: i use TD ameritrade and have never had a problem with the discount. It usually takes an extra day or more(up to a week once) but it keeps coming regularly
The June 2015 payment was at $10.0795--July 2015 payment was at $9.6425.
In a conversation with TD some months ago they explained how it works. DNP sends the discounted shares (up to 3 decimals) to TD and when TD receives them they are credited to my account exactly as they received them. (WITH NO FEES)
I would suggest you call your broker --Speak to the dividend dept (or whatever they call themselves) and explain what you want and are entitled to. It might take more than one call because few companies give these discounts and some brokers might find it easier to pocket the discount money themselves.
It is no mystery as to how or what the discount should be per share.
The payment made in july went X-Div on June 26 and was payable on July 10,2015
The closing share price on July 9 was $10.15--The closing NAV on July 9 was $8.97( This figure is available at about 6:30PM by checking XDNPX-----95% of $10.15=$9.6425 I received the discounted shares on July 13 , 3days later. It usually takes 2-3- or 4 days. Back in Jan the shares were credited on Jan 20 -Probably due to year end bookkeeping on the funds part.
The discount is up to 5% when the fund trades at a higher premium to NAV otherwise the discount is down to NAV.
If your broker can't or wont accomodate you, you might have to switch brokers.
Hi Akebono:It was a pleasure meeting you also in NYC. I'm glad I was able to be of help in those dark days. the problem today is I believe many are/will be making a similar wrong decision with MWE at the present time. Frank Semple is setting MWE up for the next 25 to 50 years of massive growth and capital appreciation with this transaction. A lot more to come...Even more than up to now
Stay in touch....Best Regards