Yes, you misunderstood. The dividend that they already declared is fine. Already gone ex-. Relax. Starting in October, they will announce one more divvy (presumably one third the amount of the quarterly one that just was declared. adjusted up or down as conditions dictate). The one they declare in October will be paid in Nov., the one they declare in Nov. payable in Dec., and the one they announce in Dec. presumably payable in Jan. but taxable in 2014. Relax, relax, relax.
I'm as annoyed as the next guy that there's been no announcement yet. And yes, many of us remember Q1 2013 when there was in fact a problem (though later resolved and no great consequence). That said, I've read companies say for years that the preponderance of time novice investors try to read far, far too much into the timing of announcements, and that many times it boils down to some decidedly non-sexy issue like when the board has its meeting.
Will be announced when the dividend is announced. Per past practice, announcement could come as early as this afternoon. My best guess is that the ex-date will be Sept. 26 or 29, but wait for the announcement. You can't find it because it hasn't been released yet.
As I interpret the last couple of conference calls from management, and the last printed fund report, the trend could eventually (the last call indicated mid-2015 or perhaps not up to a year after that) force a downward adjustment in the monthly dividend. Increased price volatility is also possible, we were told.
My theory is that it is large holders / institutions concluding that the 30% premium to NAV is too rich going forward. Particularly with what is going to be (long-term) pressure on the dividend as interest rates rise, discussed in the conference call last week. Many sold off in one swoop, in my opinion, taking the premium down almost immediately to about 25%, And of course the broader market selloff didn't help, either.
Bought back in at a penny a share less than I sold Tuesday, so more than covered my commissions and am whole. Will have to watch this even more carefully (if that's possible!) going forward, but for now, no harm, no foul.
Update, Thursday afternoon. The manager, Mr. Feltus, seemed generally upbeat in the conference call. He once again said, regarding the dividend, that nothing is forever. And he referred to the last paragraph in the company's written report that he said communicated exactly that. But in today's call he also indicated the divvy "is secure" for now, and by "now" he seemed to indicate one year and hopefully two. As I left the call, not one person had queued up to ask a question. Mr. Feltus must have known that, saying we could even ask about what the Red Sox should do if we wanted to. The operator was making one last offer so somebody may have come in later after I disconnected, but I doubt it. Generally seemed a relatively happy, and short, afternoon.
PHT over the years has been very, very good to me. That's an understatement. However, I took money off the table this morning and sold my wad at 18.36, having already locked in the July dividend when it went "ex" last week.
May get back in, but not until we get a little more clarity after Thursday afternoon's conference call from management. Here's my reasoning. We know that PHT has been "dipping into the kitty" of undistributed earnings to keep the dividend level, and the last conference calls have made it clear that while the dividends were level for now, that nothing is guaranteed to go on forever. Since the fund has been continuing to use undistributed earnings to pay the dividend since the last call, I am figuring there might be a slight change in tone after this week's call, maybe preparing us more or an (eventual) reduction in the monthly divvy.
If I am right, that could drive the share-price down and allow me to buy back in to this wonderfully managed fund at a better price. If I am wrong, I suppose the share-price could drift even higher while I am out of it. But how much higher can it go? As of yesterday's close, by my calculation it was already at a 30.5% premium over NAV. Anyway, that's what I did. We'll see. . . .
That's correct. And the conference calls I've listened to, literally for years, and a recent written report or two, have made it clear that nothing is forever. They're having to use part of the "kitty" to make the dividend payment so in the long run the current div level is certainly no sure thing. When one looks what's happened to interest rates, it's quite amazing it's lasted as long as it has.
I did note that their C.I.O.'s final comment on the conference call this morning -- right before they opened it up to questions from analysts -- was an upbeat comment about being optimistic to being able to continue attractive dividends. Obviously he didn't say what they would be -- and I am not trying to overanalyze what he said -- but I did find it at least a little notable that he ended on that note.
Every once in a while a REIT will classify a few pennies otherwise, but yeah, as a rule of thumb, ordinary income.
You've got to watch the REITs and their third-party companies and the brokers when these go to the 1099-Bs. I ended up going to the mat with TWO (Two Harbors) a few years back when my 1099 showed all their income as qualified. Bureaucrats blamed each other from the brokerage to TWO's service bureau, and nobody admitted it was an error, which it obviously was. Two put it mildly, TWO was not investor-friendly/responsive to my inquiries. So finally I gave up and just decided to report it as nonqualified ordinary because I was sure I was right, and wanted to get my 1040 filed.
Sure enough, just days before April 15 they caught their error and sent out revised 1099s saying it was nonqualified ordinary income, which caused many people (but not me, thankfully) to have to amend their 1040s with the I.R.S.
I see it as Mark does. Ordinary income. The statement last week makes it clear they're passing it on to us so they can comply with REIT (tax) requirements, in other words so that they don't pay taxes on the amount. If they don't pay taxes on it, we do! It's not return of capital. I already adjusted my 4Q estimated income tax to account for the $2.35 dividend.
They in fact have made the second announcement. Came the day after the first December divvy got paid. Nothing's changed.
Nothing's changed from last few years. Same amount. Ex- and Record dates in December. Payable next month. My reading of the tax code on regulated investment companies is that the dividend is taxable in the old year. Normal practice would be that after the dividend announced today, the next one picks up on monthly schedule in February.
Where, pray tell, did you see that they were "supposed to" announce it yesterday? From this board? If so, Ha Ha!
Look, call up their dividend history on their investor relations page and going back to 2008 you will find 4Q dividends announced between Dec. 12 and 19, inclusive. I think it probably has more to do with the way the dates fall in the week and the dates their board meets than it does the Fed meeting, but certainly not a reason for panic. Remember, they are required by law to distribute 90% of their income as dividends, to avoid excise tax. So you're saying they have nothing to distribute at all. Come on. To say there won't be a 4Q divvy is panic mongering, and also untrue, in my opinion.
Ho hum. Here we go again. People saying somehow PHT has changed and made things worse for December. People do this every year. Unless you know something I don't, pucktoretiresoon, I would expect a "January" dividend to be declared a week from tomorrow (the 20th, the day after the Dec. dividend gets paid) and that "January" dividend to go "ex" and be taxable very late this month, payable in January. Then go back to a regular schedule in February. Been that way for years. Here's the 2011 version:
No, .80 per quarter as opposed to the 1.05 per quarter paid three months ago. Looks like somebody doesn't know how to divide by four the 4.20 annual dividend he saw on some chart. AGNC up in after-hours trading, btw.