The House of Representatives has just past a Puerto Rican debt relief bill. So now what? The $2 billion they owe on July 1st will now just appear by magic?
I would actually feel more comfortable if the dividend DID drop to something sustainable. I would prefer a rock-steady 15% to a questionable 20%.
So if they earned $0.13 a share, and they have to distribute 90% of that, that's $0.117 a share.
$0.117 ( x 4 ) / $5.41 = 8.65 % sustainable yield ; slightly lower than we are getting now.
Though the company is making money, their bonds are really cheap. They are paying double digit returns.
Is there a realistic chance these guys will go bankrupt? Usually big returns on bonds is a sign of a company in very big trouble.
I guess I'm wondering what everyone else is. If we add to our positions, how long do we really think we are going to reap a 20 + % yield?
Despite their problems, this company is making money. They are turning a profit.
So if they are turning a profit, why are their bonds so cheap? They are yielding over 11 %. That kind of yield is for a company that's losing money. Makes no sense.
Looking at their recent tax statement, it appears a good portion of last year's dividends were return of capital.
Should I be worried?
Evans sent a message to the bankruptcy court judge.
Your Honor : Please be advised that your opinions and judgments in this matter will be of no relevance. I will be making all the decisions here. You are just some worthless judge while I am the CEO.
Let's see how well that goes over.