We will see some dividend increases. However, I do not expect them to be significant (one man's significance is another man's insignificance). While SUI's business is rock solid, the yield now is very low.
The last nine years were a long sea change - transition to secured mortgage model, the crisis making regular housing more difficult to get, declines in interest rates, the struggle with their financing arm, followed by deleveraging from very high levels. Lots of big things, really.
So what will the next nine years bring?
Bullish signal might be reading too much into things. Essentially he is paying taxes of roughly $45k, and getting 1,929 shares (using your numbers, which I presume accurate) - a cash cost of $23 per share. Pretty hard to lose money on that trade.
This probably falls in the area of tax planning. SUI switched a few years back from granting options to granting restricted stock. In 2012 he was granted $74k of restricted stock. In 2013, over $80k. In early 2014 he was granted 2k of restricted shares. He can either elect to be taxed immediately on the grant, or he will be taxed upon vesting (3 years). Very possible he is trying to avoid the doubling up of income from stock activities in future years.
dar, don't curse Kinder for *your* failure to follow through on *your* plan to hold until death. That was entirely within your control, all you had to do was die. Kinder just set the time frame! There is still time before the conversion, but too late for you since you sold.
Frankly, that is a risk with all stocks. Companies get acquired, reorganize, etc. The best laid plans to get stepped up basis can go by the wayside pretty quickly. Ask Donald Sterling. You were simply long tax risk.
Do you hold NRF in both taxable and tax deferred/Roth accounts? As a taxpayer, wash rules apply on an aggregate basis - that is, across all accounts. If they are all gains it does not matter (no wash sale on a gain, only a loss), but a lot of activity across accounts in a short time makes it easy to trip up and create a wash sale loss. I can also imagine if you report differently than the broker reports (due to aggregating) that it will trigger IRS letters.
Also, do you ever compare your flip returns to the market returns on the period of the trade? I have done a few flips, and usually the return is a result of the market changing direction and the security just goes for the ride. It may be immaterial, since you know the securities and would rather trade them than say an index etf - but is still informative.
dar, the one challenge for NSAM is expectations. Anyone who looked at the spinoff realized that NSAM would have significant growth well beyond the 66 cents - and that growth was baked in by raising money for NRF and the nontraded reits (an investment which is increasingly coming under attack, btw). Bluebirds were not necessary to achieve significant growth, just continuation.
Your estimate of 78-80 cents is well below the estimate I made at the time of spinoff. Was the forward pe (NSAM valuation) based on 66 cents, or a reasonable forward estimate such as your 78-80, or mine? For me, my willingness to hold some NSAM was based on the latter. That is to say, the high valuation was not too disconcerting given my belief NSAM should grow into its valuation over the near term.
Vanguard will have a CFP work with you to setup a plan and will implement and monitor it for .3%, provided you have more than $100,000. That is pretty cheap. You can cancel anytime I believe too, and if they charge quarterly like many advisors, your cost should you not be pleased is only 1/4th of .3% . They have excellent low cost choices in both funds and ETFs as well, so from an advisory standpoint, I would suspect Vanguard will be as cheap as you can get - and likely very solid. (I have not used their advisory services).
What is your current porfolio?
Absolutely. Low cost ETFs such as VTI, VOO or such are excellent vehicles to invest using after tax money and still have tax deferral to a large degree. Further, many such ETFs have no commissions.
I was always biased against mutual funds because the turnover led to high annual taxation. ETFs sidestep that due to their structure, and the fact that they are generally index funds with low turnover.
No need to bless my correctness.
With a Roth, as present rules stand (may change), I can have my grandkids as heirs. So, let's say a 50 year old lives to 90 - compound 40 years tax free, followed by 60 years for them with mandatory but much smaller annual distributions % wise (and no tax impact on them). Hard to beat that. (Even an 80 year old can convert, leave to grandkids and get decades of tax free compounding, if they do not change the laws.)
Tax deferred would give the same 40 years, but diminished by mandatory distributions. Heirs then have this taxable income on top of theirs, outside of their control.
It is hard to plan out all the circumstances. Generally correct is better than precisely wrong. (That is not a comment about your post, but is a comment about much of the analysis I see.) You really cannot plan all the circumstances, thus the desire to have mutliple sources which gives you options. Every year you know more and can adjust appropriately.
Much of the analysis is predicated on using funds within the account to pay for the tax, and that is definitely detrimental. However, almost everybody I have dealt with in this regard (admittedly not many, but folks in widely varying circumstances) has plenty of liquid assets to pay the taxes externally to keep the full amount compounding. Further, they have not needed the distributions at all for living purposes so their will be a good sized residual passed on to heirs. All they do is take the distributions and move them to another account. Even if they only take the mandatory distributions and spend them (4%ish rate, rising to 6-7%ish by your mid 80s), the balance may well not decline at all!
Obviously, someone who depends more than the minimum distributions to fund their retirement, and does not have a long window to retirement, is better off tax deferred than tax free. I probably should have clarified that.
Correct, but the poster has IRAs. If you have IRAs - or if you might have IRAs in the future from rolling over a 401(k), creating a nondeductible IRA creates complications and are best avoided in my opinion. Further, with $1mm in tax deferred savings, a $5k annual IRA contribution followed by a conversion is probably not worth considering for the effort involved.
Many employers now have Roth 401(k) options too. Aftertax 401(k) contributions in such a plan may also be converted to a Roth. You are less likely to have multiple 401(k) accounts, but the circumstances of how you contributed and invested in the 401(k) impact the decision.
It all gets very specific to each situation, but it really not that complicated if you read the rules.
It is best to pay the taxes on any conversion from funds outside of the IRA so the same amount of money is left working on a tax free basis, too.
One clarification - a nondeductible traditional IRA is different than a Roth. The former has particular complications; I avoid them. I would just invest in the tax deferred IRA and convert that amount to a Roth, or just take the after tax money and invest it outside of an IRA altogether.
Saaco, the best thing is to have options - a mix of taxable, tax deferred and tax free. One of the fallacies that people believe is retiring in a lower tax bracket. Social security, pension, dividend and interest income, capital gains, and mandatory withdrawals can get your tax bracket up very easily. Not to mention once you exceed certain levels ($170k married, $85k single) your Medicare premiums go up - a stealth tax increase. It increases again at $212k, and then again at ... Then, of course, whatever is left over in a tax deferred IRA has to start being drawn immediately by your heirs, who might be working, thus pushing their tax brackets up.
A particular problem occurs when one spouse dies and suddenly you are in a single tax bracket with pretty much the same income. Higher tax rates and increased medicare premiums, maybe several levels up.
To the extent your tax brackets allow, a program of annually or periodically converting some amount of traditional IRA into a Roth may make sense. Say you retire early (voluntarily or not), that is also an opportunity to convert some to a Roth before mandatory distributions kick in. Perhaps before you begin drawing social security. Or convert some in a year in which you have business loss, or such.
All one way or all the other is bad. Folks often want to convert everything or nothing - and that also introduces market risk by converting before stocks decline. Some each year, over time is a better approach.
Tax laws will change. Some proposals could result in over half the retired population exceeding the income at which Medicare premiums increase. Others have Roth's require mandatory distributions, or not allowing the heirs to take them over their lifespan, but over a 5 year period.
A lot of the articles about this topic are flawed, even by professionals with lots of credentials. Tax free compounding is a wonderful thing, if the upfront tax cost is not too high.
I just googled Vanguard and they enter a market order at the open. NRF opened at 18.50 and they bought at 18.4997 per the poster on the other thread.
Googled Ameritrade says they will reinvest the dividend the day after confirmed receipt of funds (thus the delay). They do not specify purchasing method, but say they will use the DTC Dividend Reinvestment Service where advantageous and the DTC tells them the reinvestment price. They also will not reinvest dividends that do not buy at least a full share.
dar, have you ever asked Fidelity and Ameritrade (your brokers) how they drip? I suspect they follow a policy such as buying at the open, buying at the close, or such - and it is the policy that drives the difference. That said, I do not know since I don't drip stocks.
My understanding was he founded the Whitehall real estate activities at Goldman. Whitehall ultimately failed and has been shut down. However, I believe it faltered well after he left. Anyone who knows the history of Whitehall, chime in!.
The acquisition looks very positive to me. Geographic overlap. Same mgmt software used. Sellers going on board and taking big equity stake. Refinancing opportunities. Term loan committed so that line of credit flexibility is retained somewhat.
I like that SUI has identified addl 14 properties for sale. Can't grow like they have without reallocating capital. Note that the accretion does include issuing another $100-$200mm in equity.
My calcs estimated a dividend of $2.68-$2.72-$2.76 - 8 to 16 cent increase. I suspect it will be 8-12 cents, rather than 16. Timing of increase depends upon a number of things.
I am fully aware of the power of incentives.
If you believe there is less risk that NSAM will earn double the rate of total return of NRF - you logically would sell ALL of your NRF and put the proceeds into NSAM. I am guessing you have not done that.
In any event, I want both to do well, and - for the time being - own some of each.
By the fundamentals, NRF should achieve pretty darn good returns with significantly less risk than NSAM. NSAM has the potential to achieve higher returns, but the factors that will allow them to do so are much more outside of NSAM's control, in my opinion.