What they are saying is the distribution of NRZ stock generated earnings and profits of $2.40 all by itself. The total value distributed was $6.89. It is possibe that additional E & P is generated which will make some of the $4.49 also taxable. It is also possible that none will be taxable. And it is also possible that some (or even all if something bad happens) $2.40 may not be taxable. In other words, a company cannot predict the future and should not predict it in any case. GLTA!
Well, I think it does have a temporary inverse relationship. Currently, there has to be similar ownership due to the recent spin-off. I would bet that some shareholders are selling one and buying the other creating the inverse relationship. This will slowly (maybe fast) dissipate as the common ownership becomes less.
NCT issues stock and does a deal that does not add to fund available for distribution per share? Zero!!!! My point being that the fact there is an issuance is should be welcomed, not second guessed.
No, they don't. They get it for that price but make a fee. Take that price times the amount of share less fees equals the proceeds.
Great!!!! That means a big deal is in the works! I am sure there will be leverage so the returns will be juiced. I don't think the pricing will be set for a couple days.
Not sure where you live. But you don't need a green card to purchase a home in the U.S. I have competed for a few homes over the last few months and have lost out to a few bids that were all cash. Some foreigners buy homes here and come and stay for a few months each year. Not sure how long tourist visas are. Buying a home in another country spreads your risk. Not sure about IT professionals.
Yes, you are correct. Theoretically, a REIT could invest in a regular C corporation and pass through the related dividends to its shareholders. It doesn't happen too often as their are prohibitions to owning too much stock in C corps. and the expertise of officers is usually in real estate.
For what its worth, I have made the most money from stocks that I have held for years. I picks stocks that have strong management with a good plan and wait for them to implement that plan. I rarely do short term trades, but I have done a few in the past on special circumstances. I don't believe NCT or NRZ are short-term trades.
REITs will have downward pressure as rates rise, but REITs that can grow without too much dilution will do okay. Maybe treading water, but the dividends make it pay to sit there. I have been in REITs for the last 12 years and it has paid off. The past may not predict the future, but maybe.
Anyway, contrary to what is being bantered about, I do think we will be fine and stocks in general will also be fine. Its not only homeowners upside down who benefited from the QE's (and I am not so sure it's gonna be tapered back as soon as everyone thinks). Just about all corporations with any kind of pulse, I would imagine, has reengineered their balance sheet by now to have taken advantage of all this cheap money. This means that even with low demand they can stay healthy and ready to explode when demand comes back.
Take a look at their manufactured housing loans etc. I don't believe those loans are long-term like regular houses. They will slowly bleed off and the cash will be put to use in the senior housing industry.
I don't understand your post. Are you saying there is bad news to come about the dividend? Or are you saying that there will be a raise?
Not sure how the operating cash will get hurt because the price of the stock drops. If you are saying that FUTURE deals will be more difficult, maybe. But the price of the stock does not directly affect the operating cash flow. With regards to NCT, it has already demonstrated that it is able to do senior housing deals using leveage. With regards to NRZ, alot of its prior MSR deals are returning cash very quickly and in the next year or two will have returned most of the principal invested. Rising rates will also mean that there will be more investments available to put some of that cash to work which will mean more cash for dividends.
NCT: Once the deal with the senior housing is done, I expect some upward movement. NRZ: Once the partnership deal with the mezzanine debt is done, I also expect some upward movement.
In my opinion, its just a gut reaction today. The REITs and MLP's pay a very nice dividend and investors are worried about rates rising. Once the dust settles down and they realize that rates are not going to rise too soon and when they do, not precipitiously, they will come back. What are they going to do, buy bonds? :) Sit on cash? Maybe gold?
Previous posts have already explained how this works. Here it is.
The cost basis of NRZ will equal its FMV because it was a taxable distribution. That does not mean you reduce your cost basis in NCT prorate!
If we assume the FMV of NRZ is $6.55, then that amount will need to be broken out as follows:
Dividend = taxable to recipient
return of capital = not taxable, but reduces basis of NCT stock
any amount in excess of basis = capital gain
So for example, if $4.00 is a dividend, and your basis in NCT stock is $5.00 then the following is true.
$4.00 is taxable
$2.55 is a return of capital and reduces your basis in NCT stock to $2.45
Hope this helps. By the way, I do not believe the taxability of the NRZ distribution can be determined until the end of the tax year.