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American Capital Agency Corp. Message Board

divyinvstr 133 posts  |  Last Activity: Mar 13, 2015 12:32 PM Member since: Jun 30, 2011
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  • Reply to

    dividend increase

    by biglob55 Mar 13, 2015 9:59 AM
    divyinvstr divyinvstr Mar 13, 2015 12:32 PM Flag

    Nine months ago the index, according to BAC/ML estimates for each company, had an expected distribution growth rate of just under 7%. Since then one of its largest components, KMP, has been removed and replaced with slightly faster growing companies. However, due to the conditions in the energy industry, distribution growth rates have been lowered. I haven't run the numbers yet, but I would suspect the index growth rate has been lowered to approximately 6% with the near term bias for additional declines. A 2X the index growth rate that still leaves dividend growth (really interest) of near 12%. Another caveat is that if short rates rise the cost of leverage will also rise, eating into the return. I do believe that the cost is born by the NAV and not the dividend, however. So, barring a true disaster in the MLP space (which could, of course, occur) dividend increases should remain somewhere near the 10% range (assumes 5% CAGR on the index).

  • Reply to

    Oil Price is up and MLPL is down

    by weirherr Feb 9, 2015 3:46 PM
    divyinvstr divyinvstr Feb 15, 2015 4:34 PM Flag

    The price of MLPL reflects the pricing of the Alerian MLP Infrastructure Index, not the price of oil.

  • Reply to

    Is this suitable for a Roth?

    by durangokidd2106 Jan 6, 2015 9:25 AM
    divyinvstr divyinvstr Jan 6, 2015 12:08 PM Flag

    Payments are interest payments - this is structured as a bond. You pay taxes at your marginal rate and you do not get a K-1.

  • Reply to

    Is this suitable for a Roth?

    by durangokidd2106 Jan 6, 2015 9:25 AM
    divyinvstr divyinvstr Jan 6, 2015 10:00 AM Flag

    This is an Exchange Traded Note and not an MLP. The dividends are really note (bond) interest payments from the issuer, UBS, so there are no tax issues with holding in a ROTH.

  • Reply to

    Market expected more of a beat?

    by mudbuttmike Oct 30, 2014 12:47 PM
    divyinvstr divyinvstr Oct 30, 2014 3:13 PM Flag

    No, I think the implication that the new plants are opening more slowly than expected (slower than expected growth) combined with the weakness in oil prices.

  • Reply to

    18% Distribution Increase!!

    by tylertiff Oct 23, 2014 4:02 PM
    divyinvstr divyinvstr Oct 23, 2014 4:30 PM Flag

    Agree, third quarter much better than I, at least, expected. Happy to have been wrong!

    Sentiment: Strong Buy

  • Reply to

    $120s

    by flightmomentum Oct 22, 2014 4:45 AM
    divyinvstr divyinvstr Oct 23, 2014 4:28 PM Flag

    Appears third quarter was great. Annualized from $4.68 to $5.52!!!

    Sentiment: Buy

  • Reply to

    $120s

    by flightmomentum Oct 22, 2014 4:45 AM
    divyinvstr divyinvstr Oct 22, 2014 8:53 AM Flag

    Not sure third quarter earnings will do it. Perhaps better spot pricing will increase DCF. Keep in mind that 5 cents of the last dividend was paid from a previous quarter. Not sure that the new plants have contributed in a really meaningful way as yet. However, the 4th quarter and 2015 guidance will, hopefully, begin the process of moving the price back to the 120+ level.

    Sentiment: Buy

  • divyinvstr divyinvstr Oct 10, 2014 4:36 PM Flag

    I believe the chart represents the price needed to meet each country's internal budget requirements, not the cost to pump oil - the price needed to pay off the population.

  • Reply to

    Why the reversal

    by chicadow Oct 6, 2014 2:51 PM
    divyinvstr divyinvstr Oct 6, 2014 5:03 PM Flag

    If the growth story concerning demand for sand remains intact, or is even generally intact, EMES will continue to move higher. It is not so unusual after such a huge rally for gains to be taken during periods of little or no confirming information. However, with the distribution announcement in late October and, particularly, the quarterly disclosures on or about November 6 concerning future DCF guidance we will get real information and not talking head opinions. Given that we have been told during fairly recent presentations by EMES and others in the industry that demand has been exceeding supply I find it unlikely that market forces have reversed to the extent that the sand growth story has been reversed.

    Sentiment: Strong Buy

  • Reply to

    Thinking divvy announcement 10-6

    by a0002604 Oct 5, 2014 11:02 PM
    divyinvstr divyinvstr Oct 6, 2014 10:49 AM Flag

    The first monthly dividend will be declared in October and paid in November, The third quarter dividend will be a three month, or quarterly, dividend.

  • Reply to

    RECENT DROP beside divy

    by bn538 Sep 30, 2014 3:26 PM
    divyinvstr divyinvstr Oct 1, 2014 11:29 AM Flag

    Yes, there is sensitivity to movements in the 10 year UST, but much (though not all) of the Treasury movement is hedged. What is not hedged is the relative price movement between mortgage backed securities and and UST securities. When mortages widen versus Treasuries MREITs generally trade down as there has been an unhedged hit to book value. The opposite is also true, MREITs tend to perform positively when mortgages yields tighten to Treasuries.
    Additionally, fear (as well as actual) of short rates rising will cause MREIT prices to decline as any relative rise in short rates reduces the spread between borrowing costs and the portfolio yield, directly reducing income available to pay dividends.

    Sentiment: Hold

  • Reply to

    Dividend

    by divyinvstr Apr 2, 2014 10:26 AM
    divyinvstr divyinvstr May 21, 2014 11:47 PM Flag

    Dividend growth of 12% - 13% per year plus the 9% plus dividend should drive, over time, a much better total return. Dividend growth drives total return. Do own MORL and recently bought BDCL. As a long time MLP investor I expect MLPL to outperform the others, including, CEFL easily. A look at historical returns of both the underlying indexes and the short history of these securities makes this quite obvious.

  • divyinvstr by divyinvstr Apr 21, 2014 12:50 PM Flag

    From Investor Village:

    Atlas Energy LP (NYSE: ATLS) and Atlas Pipeline Partners L.P. (NYSE: APL) were recommended as shorts by Hedgeye, according to Bloomberg. Hedgeye said distributions were funded with capital raises and not "real profits" and this can't go on for too long. Hedgeye plans to publish a full report on April 24th.

  • divyinvstr by divyinvstr Apr 2, 2014 10:26 AM Flag

    Likely payout appears to be at least $5.60 for all of 2014. The underlying MLPs have an expected dividend growth rate of just a little less than 7% (at least according to ML reports). With a multiple of at least 1.7x the dividend should get there. And please realize this is back of the envelope and not meant to be exact.

  • divyinvstr divyinvstr Feb 19, 2014 1:37 PM Flag

    So if I own a business and borrow money for a new building and the new building costs more than my business makes in a year, if I then go out to eat lunch at the local taco stand am I just eating up the borrowed money?

  • Reply to

    A question about the DCF

    by earth457 Jan 31, 2014 11:27 AM
    divyinvstr divyinvstr Feb 3, 2014 10:30 AM Flag

    Taking a different tact. Bought at under 20, will collect the distribution and will wait on earnings as I believe coverage will be at least 1.1X or so (BOA/ML predicts 1.2X coverage). If coverage is as I expect their could be a rally into the 9% range (2.20/.09=24.44). However, as always, we figure out what we can to fill in the blanks but can't know if we are correct until after the fact.

    Sentiment: Buy

  • Reply to

    A question about the DCF

    by earth457 Jan 31, 2014 11:27 AM
    divyinvstr divyinvstr Feb 1, 2014 1:46 PM Flag

    Coverage ratio was less than 1 due to the timing of asset purchases. The costs were recognized while cash flow from the assets were not in the third quarter. Recognition of all cash flows should bring DCF coverage to well above 1 when first quarter numbers are reported.

    Sentiment: Buy

  • Reply to

    Why is this stock....

    by gumballchewer Jan 23, 2014 9:13 PM
    divyinvstr divyinvstr Jan 30, 2014 8:36 AM Flag

    With Fidelity I just have to acknowledge the risks. BOA/Merrill Lynch blocks the leveraged ETRACS. They tell me it is on an internal, non-public banned list.

  • Reply to

    HEADING ON UP TO THE BIGTIME.

    by artusaj Jan 21, 2014 4:43 PM
    divyinvstr divyinvstr Jan 29, 2014 2:29 PM Flag

    Yes, spreads will, over time, increase as new, higher yielding securities replace owned lower yielding securities. However, book value can (and does) change quickly as rates change. A lower book value requires that the portfolio become smaller if leverage is maintained and to become much smaller if leverage is reduced. Hedging can help reduce the impact of higher treasury rates, but hedging cannot help if there is a simultaneous widening of mortgages versus treasuries (see Spring 2013). So in the near term one is left with a smaller portfolio of older, lower yielding securities and almost certainly a lower dividend. The impact of higher rates longer rates, even when short rates remain anchored, is almost certainly negative for MREITs in at least the short run.

AGNC
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