23.3%. (To calculate an annual yield as a percent take the yearly dividend, $0.50, and divide it by the share price $2.14.)
The Pimco web site shows a UNNI of zero with a current distribution coverage ratio of 101.8%. The UNNI chart on the web site is current as of September 30, 2015. I believe that is the most accurate and the most recent information available on the UNNI. If these numbers from Pimco's web site are accurate and don't change it appears that since the dividend cut the fund has been earning slightly more than they have been paying out and in theory the UNNI should start to rise from here. I bought my shares of PHK (and NCZ) after the dividend cut and I'm planning to hold long term for the dividends.
Dan, I think you were smart to buy some PHK on Friday and that in the long run you will make money on your PHK investment. I've been eyeing PHK ever since they cut their distribution but I think I'll wait until early next year to decide whether to buy any PHK. It doesn't look to me like PHK cut deep enough. But I don't know.
Regarding the NAV on PGP let's just agree to disagree. I think you are partly right. But I think the NAV is down mostly because the global market value of their investments is down and that in a six months the NAV will be completely different. I actually suspect this fund is a bargain right now. I could be wrong. Only time will tell.
Good luck with your investments.
Dan, I'm not sure where your information is coming from. Please understand that I mean this in a friendly way because if I've missed something here I certainly want to know about it.
The fund's website shows a monthly income of 20 cents a share, with a distribution of eighteen cents a share and a dime a share in UNNI. Those are the most recent numbers that I know of and I assume the fund's numbers are accurate. Am I missing something here? If the fund earns enough to over-cover their distribution why would they cut the distribution and why would they be returning capital?
PHK and NCZ cut because they weren't earning enough to cover their distribution. They reported their earning shortfall months ahead of their distribution cuts. Also PHK and NCZ are domestic junk bond funds where-as PGP is a global stock fund. Their sources of income are different.
It looks to me like the NAV is down because the global market is down. But I'm not sure that isn't temporary and that the NAV will go back up when global markets go back up. I don't see any return of capital in their annual report.
Like I wrote above Dan, I mean this in a friendly way. I sold off NCZ just before they cut their distribution about two months ago and put the money into PGP. If I'm overlooking something important here about PGP I really want to know about it.
Hi Nicole. We seem to be the only two people on this board! It isn't a very active message board.
You raised a good point. The separation between the NAV and the share price is troublesome. This morning the NAV is 11.58 while the share price is 15.65.
But it seems to me that it depends on what you want from the fund. For me this is a stable income assett. I fiigure the NAV is going to fluctuate with the global market and six months from now the NAV will be different. I'm patient. I can wait. What I'm focused on is the steady distribution. According to the UNNI chart at the Pimco web site as of July 31, 2015, PGPs year to date distribution coverage was 111.41% and the undistributed income was a positive ten cents a share. So unless I'm reading the chart wrong the distribution is not in any danger. That's a 14% distribution yield at yesterday's close for a fund where the price per share has a history of often trading in the low twenties.
What I want here is a steady distribution with the possibility of an eventual capital gain in a few years. I'm not happy about the NAV. And you are right about that. But like I said I'm patient and all I really want from PGP is a steady distribution. The NAV will change in time.
Ever since PHK lowered it's dividend, the share price of PGP has been going down. Seems a bit strange. The two funds are unrelated. Unless I'm missing something it looks to me like PGP, unlike PHK. earns enough to support its current dividend. (I'm getting my information from the Pimco website.)
I'm guessing that a lot of individual PHK investors were also PGP holders. When PHK reduced their dividend many of these investors rushed to sell all of their Pimco funds. For the larger Pimco funds like PTY this panic selling would barely register. But PGP's daily trading volume is so low that this panic selling might be enough to cause the drop we've been seeing.
This is just speculation on my part. If anyone has a better explanation for why we are going down I'd be interested.
That's the magic question, isn't it? Per the transcript of the company's conference call, they said they expect their distribution coverage ratio for the second half of this year to range from 1.92X to 2.47X. In contrast ARP is running somewhere around 0.86X coverage and will probably cut their distribution in January. And LINE is covering their pre-cut distribution and could be paying a distribution if they wanted to but chooses not to. Bottom line is that BBEP has enough free cash flow to continue the distribution at the current rate if they choose to, but whether they will choose to actually continue to pay at the current rate or not is unknown. My best "guess" is that they will continue to pay at the current rate but I don't know what's in their head.