The discount drip price is 95% of the average of the daily highs and lows of the 5 trading days immediately preceding the pay date. The calculation period begins today, 8/7 and ends with 8/13. I will post the discount price here at the end of the calculation period.
NSAM will pay at least a dime in Nov and Feb. Take it to the bank. There is NO WAY (short of WW 3) Hamo will allow the aggregate post spin dividend to decrease. It just ain't gunna happen. As to yield, you figure it out.
1.60 minimum go forward dividend / 9% = 17.7777 purchase price. 17.78 + .50 = 18.28.
Buy NRF at 18.28 or less before 8/14 and you get 9% or better.
Holders of NRF preferred yielding less than 9% in retirement accounts, pay attention. Now is your chance to switch to common with no decrease in yield. Your preferred dividend will NEVER increase. Your preferred price is capped by the 25 call provision. Eventually, inflation will erode the purchasing power of principal and income from preferred.
If you hold preferred in a retirement account and do not switch, you need a guardian appointed, imo.
Yeah, but even a slow, lazy market will eventually figure out that paying 18.50 before the ex date means buying a 50 cent dividend and paying 18 for the stock. Then this lazy market might think a little. They might figure out that 1.60 / 18 = 8.8888% yield. Then they might be willing to pay 18.50 before the ex date.
Update on non traded reit fundraising.
479 million collected ytd
208 million in 2Q ( I estimated 200 million)
97 million in July.......an average of 3.1 million per day
Now let's connect some dots, something the market is too slow and lazy to do by itself.
Since they collected 150 million in 1Q, 208 in 2Q, 97 in July = 455 thru july
479 ytd - 455 thru july = 24 in aug thru yesterday...6 days = 4.0 million per aug day
Now you know something 99% of the market doesn't know.
NRF is not going to speak for nsam at a nrf cc or in a nrf press release.
However, a separate nsam press release tomorrow announcing an intention to pay a nov and feb div of 10 cents would not surprise me. Then the whole world would be told the dividend in the aggregate is not going to decrease due to the spinoff. I think this is needed to close the circle. I would not be too surprised if such a press release announced a board authorization of a stock buyback.
I posted here already......my apartment has a common wall with nrf's boardroom.....and it is thin.
Announcement of the Nov dividend today did not surprise me, but I must have been on the phone when they decided 40 cents instead of the 36 I predicted. If nsam is 10 cents in nov. I also missed the "keep aggregate the same" conversations.
BTW, if you holders of preferred in retirement accounts do not switch to common before the price goes over 18, IMO, you are nuts!!!
In a taxable account, you have to consider the yield on after tax proceeds from selling preferred. It makes the yield swap more difficult.
Let's assume the price is 17.50 just before ex 50 cent dividend. That means 17 ex div.
So, we get a minimum of 1.60 dividend going forward. 1.60 / 17 = 9.41%.
Suppose it's 18.....1.60 / 18 = 8.89%.
Suppose it's 19....1.60 / 19 = 8.42%
Suppose it's 20.....1.60 / 20 = an even 8%
Plus, with the loss on exchangeable notes, additional depreciation and additional preferred dividends, I'm 99% that all common dividends will be tax deferred roc.
Yield investors, a table-pounder is staring you in the face.
I wonder if the 40 cents is a signal of 10 cents from nsam.
NorthStar Realty Finance Declares Second Quarter Common Stock Dividend
NEW YORK, Aug. 6, 2014 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NorthStar Realty") today announced that its Board of Directors has declared a cash dividend of $0.50 per share of common stock, payable with respect to the quarter ended June 30, 2014. The dividend is expected to be paid on August 22, 2014 to shareholders of record as of the close of business on August 18, 2014. NorthStar Realty's common shares will begin trading ex-dividend on August 14, 2014.
Following the completion of the spin-off of NorthStar Asset Management Group Inc. as of July 1, 2014, NorthStar Realty expects to pay a quarterly dividend of $0.40 per share of common stock for each of the quarters ending September 30, 2014 and December 31, 2014.
Or, will nsam pay 14 cents, resulting in an aggregate increase. I doubt it.
At the spin the insiders owned the same percentage of nrf as nsam. 1.00 out of the left pocket = 1.00 (pre-tax) into the right pocket.
Just to illustrate, assume nrf and nsam each had 200 million shares outstanding at the spin and Hamo owned 2 million or 1% of each. 1.00 from left pocket = 1.00 into right pocket.
Now let's issue the Griffin shares. Max = 68.8 million and min = 54.6 million, depending on the price of nrf. So let's say 60 million are issued. Now nrf has 260 million outstanding. Hamo still owns 2 million, so now Hamo owns .7692 of 1% in nrf while he owns 1% of nsam. So now, 1.00 going into nsam's right pocket costs Hamo 76.92 cents out of his left pocket.
Gee, nrf's cad doesn't increase the first year after buying griffin. Hamo gets no free "performance shares" in nrf.
BUT, nsam's cad increases by 10%, so the nsam board lavishes Hamo with 300,000 free shares because he did such a good job. Now Hamo owns 2.3 million nsam out of 200.3 million outstanding or 1.148% of nsam. Now 76.92 cents out of his left pocket (nrf) turns into 1.15 (rounded) into his right pocket.
If Hamo allowed himself to be influenced by his own financial interest, guess which way the wind would blow.
I don't even remember flipping it. I must have bought the dilution freak knee-jerk on a follow-on offering. I was out in a very short time....so short I don't remember the trade or the facts surrounding my flip decision. I have more than enough reits..
For those not overloaded already, I suggest buying nsam for relatively short (4 mos at the outside) trading gain.
Yeah, yeah, I know the "Buy the rumor-sell the news" routine, but the market reaction in nsam to the Griffin deal baffles me. I think it is wrong and will correct when the market sees it in the rearview mirror and/or Hamo spoonfeeds the info down lazy throats.
Financial times broke the griffin rumor on 7/8.
NRF closed at 16.72 on 7/7 and 16.53 on 7.8.....down 1.14%.
NSAM closed at 18.90 on 7/7 and 19.46 on 7/8....up 2.96%
So now we have the fact of a deal which NRF says will not be accretive to cad in the first year after closing.
Rather, the immediate benefits are size, scale, connections, diversity, opportunities for more deals. A good deal, imo, but no immediate increase in cad.
NRF closed at 16.14 on 8/4 and is 17.33 at this typing.....up 7.37%......the opposite of down 1.14% on the rumor.
I think 17.33 is still too low for a multitude of reasons.
Even a market novice can figure out that NRF will issue 1.1 billion in new common equity to close this deal which means at least 16.5 million of new nsam revenue and a 6.6 cent increase in annualized cad over the May midpoint of 66 cents. That's a 10% increase in the bottom line for nsam in one shot.
NSAM closed at 17.72 on 8/4 and was 17.99 before I started typing this.....up 1.52%.
Just does not make sense to me. Look at 5-day chart of nrf and nsam. Does not make sense to me.
I attribute it to a slow, lazy and this time stupid market.
Ya got a hint yesterday.......nrf is cad neutral with an 11.5% return on leveraged equity while nsam grows cad nicely on equity issued by nrf to fund leveraged growth in assets. Don't wait for the 2 x 4 to hit you on the head.
The real money is made before the market figures it out.
I noticed that....over 45% short. Not so with nsam though. Short volume percentage did not spike at all.