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QR Energy, LP Message Board

eatmorestock 4 posts  |  Last Activity: May 1, 2014 1:31 PM Member since: Nov 2, 2012
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  • Reply to

    Total Distribution for the year sounds higher

    by aerinlj May 1, 2014 10:21 AM
    eatmorestock eatmorestock May 1, 2014 1:31 PM Flag

    from the release this quarter and last, we know NII isn't covering their dividend. yet gains on sales are if added covering the dividend. as a BDC they cant rely on those gains I guess so they need to guide dividend to what they earn NII. Seems premature to cut dividend but....they clearly aren't putting money to work like many others. seems to me they aren't shareholder friendly. they just like earning the management fee and incentive fee which are big $$$

    aint awful, just aint good. 21c quarterly or 10% yield roughly, seems like other ways to make out there.

  • Reply to

    Boy do they suck

    by eatmorestock May 1, 2014 9:40 AM
    eatmorestock eatmorestock May 1, 2014 1:07 PM Flag

    you reference what they paid in dividend, issue is did they earn it...if they didn't then they paid you from their cash balance which comes right out of the equity of the company. they lowering forward dividend because they aren't earning it. its equivalent of you have $100 in bank but you paying $150 on your loan, so you either have to dip into savings account or borrow to pay it. that is why they lower the dividend.

  • eatmorestock by eatmorestock May 1, 2014 9:40 AM Flag

    Didn't make their dividend coverage last qtr. Didn't make it this quarter and now cut dividend. Also terrible co in that MGT and incentive fee income not spread evenly as they don't care about shareholders and consistency wanted. this is example of fee income machine run for management.

    others much better plays imho.

  • eatmorestock by eatmorestock Apr 22, 2014 7:10 PM Flag

    I have avoided the MReits for a long time as couldn't figure out when BV would stop falling and when dividends or earnings power would bottom. And related where leverage would bottom

    CYS answered all the questions today. BV around here 10% discount to NAV already reflects worry when rates go up the mark down, albeit co did good job on call describing less volatility to it given lower leverage and hedges. second, EPS power, finally you now at this leverage they can earn 32c next qtr and wait out the cycle.

    So we got 14 and change yield that is SAFE and will go higher ultimately.

    scenario 1: rates go up over the next year. they re-lever and book goes to todays price while dividends rise as they put the money to work and at wider spreads. I think the stock goes up and will follow the dividend. make both ways

    scenario 2: rates do nothing and bore people to death. you make the current spread, yield on this leverage and you earn 14 and change %. they probably re-lever so goes up modestly over time.

    summary: finally it all bottomed and you can close eyes and own. look for other Mreits before you buy if they 1) lowered leverage to their bottom and wont lower more, 2) what is EPS power on that new lower leverage and 3) whats their sensitivity to rates going forward. if #1 and #2 are like CYS, its time to buy

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