are well worth reading. As a long-term SDRL shareholder , I have assumed that the recent dividend increase, albeit minimal (.02), sends a message that the Board is confident that $1 per share quarterly is sustainable. While a 10% dividend is often suspect, recent share price action suggests that investors are beginning to realize the value and dividend sustainability of SeaDrill.
From a 6/11/14 Motley Fool article on SDRL - " ...EBITDA interest coverage ratio of 6.5 ...can service debt and pay the current level of dividends from the operating cash flows "
From Morgan Stanley on 6/16.14 -" Offshore rig demand is on the mend..We see deep value in SDRL..."
As a long-time BDC investor ( incl.FSC), the market's knee-jerk response to issuance of new shares is a drop in share price. In reality, assuming the new shares are issued above the current NAV of $9.81, the event will be accretive to current shareholders. Since BDCs have to pay out most of their earnings as dividends, issuing shares is the way they grow. I presume the new funds will be put to work promptly; average yield on debt investments is 10.8% . I expect that tomorrow's drop will be of short duration . A share price decline below the issuing price = buying opportunity. Just one man's opinion.
While receiving a response from the co. to a shareholder inquiry may be a good sign ( I've never received a response ), I agree with your assessment is quite accurate. The co. has had a sizable accumulation of cash and several years to grow the co. by acquisition. The old adage " Put up or shut up " may apply. I am not optimistic that management will follow through on their vision; but I'll continue to hold since the share price is too low to make selling worthwhile.
Your point is well taken. As a long-term RSO shareholder, I have appreciated the dividend , but been disappointed regarding lack of improvement in NAV or in share price. During the 1st quarter earnings call, management confirmed that it expected AFFO to be .27 for quarters 3 & 4. This would nicely cover the .20 quarterly dividend. Considering the increase in loan originations this year, the recent securitization, a commercial real estate portfolio ( 73%) producing an ROE of 12 - 12 % , a leveraged loan portfolio ( 26% ) with a 15 - 20 % ROE, I believe in the predicted AFFO and the safety of the dividend. To management I would suggest that even a modest increase in the dividend and/or share buyback would be very positive for the share price.
Having shares of AYR & FLY, I don't appreciate the recent drop in share prices. But I'm quite comfortable with the underlying business plans/outlook . AYR has a net interest margin of 9.5% ( rental yield of 14% minus debt cost of 4.6%) . Combine this with over 98% utilization, $715M new investments YTD, a book value of $20.30/share and a 4.6% dividend = undervalued stock price. For FLY, 15% fleet growth this year, 99% utilization, book value $18.13, dividend over 7%, $30M share repurchase program,$381M unrestricted cash . increasing global air traffic.
According to one of the experts on Fast Money yesterday afternoon (MSNBC), yesterday's stock drop was an over-reaction since the terms of the bond issuance were favorable to SDRL. As often happens , the initial response by the market to an announcement is an over-reaction. I commend management for its prompt response. IMHO, the stock , even before the drop, was undervalued; and the dividend, albeit high, is safe.
Well today we saw somewhat of a selloff on hugh volume ; and on a day with most stocks up. Might just represent an institutional investor bailing out ; or possibly a prelude to an announcement later today or tomorrow. We shall soon see. Other opinions appreciated.
As a long-term shareholder, my main concern is management's apparent disregard of its shareholders . With $2.84 per share in cash, there has been no share buyback, no dividend, no recent acquisitions and no attempt to take the co. private. Management does not find it necessary to respond to shareholder inquiries. With 35% of shares owned by insiders, I would have hoped that management's interests were aligned with that of its shareholders. While I look for improved earnings in the second quarter, I am skeptical that this will result in share price appreciation.
I agree with your assessment. The Q&A can be summarized in one word -stonewalling . My previous emails to the co. to promote shareholder value by share repurchase, institution of a dividend or taking the co. private receive no response. I will try again; and I encourage those shareholders who agree with this assessment to express your views to management.
As a long-term shareholder, I have been frustrated by the fact that the cash/share has exceeded the share price for some time in a company with minimal debt. Yet management refuses to buy back shares or to initiate a dividend. What will it take for them to consider the interest of their shareholders ? A mystery in view of the sizable inside ownership.
The drop is a knee-jerk reaction that always follows issuance of new shares by BDCs. Since new shares are issued above NAV, this is accretive for current shareholders. Today's drop = buying opportunity.
As one who received PGN shares in the spin-off, I am disappointed, but not surprised, by the drop in share price. After most spin-offs, a number of shareholders will sell their shares. At the current price I believe PGN to be undervalued considering the sizable backlog ( over $2.6B) and therefore plan to retain my shares. I will await announcement of a dividend before considering buying more shares.
I have owned this stock for a long time. Management has no interest in shareholder value. Despite the fact that the share price has been below the cash per share, there have been no share buybacks and no dividend ; and management doesn't respond to legitimate shareholder inquiries. I will continue to hold since I believe that these shares are undervalued.
I have long-standing positions in RSO & ARI . ARI focuses on commercial real estate , an asset class with little new development the past decade. Co. pays $1.60/year dividend which seems safe . Fixed coverage ratio = 5.1 x. Robust pipeline ; book = $16.21 ; 54% of loans are floating; debt/equity ratio = 0.5x . All in all, a superior investment for income investors.
The Q&A in today's earnings call can be summarized in one word -stonewalling. Management 's suggestion that the accumulated cash will be used for acquisitions is wearing a little thin. Shareholder value can be fostered by share repurchase, dividends or a buyout of the co. GURE seems disinclined to take any of these options. They also seem reluctant to respond to shareholder emails. I would encourage shareholders who share my views to contact the company -management and/or investor relations.
Time to get solicit some thoughts about this stock, which continues to lag despite the fact that it sells significantly below NAV, earns its generous dividend,has insider buying has 100% senior secured floating rate loans , and 1SB/4B/1H ratings by the analysts that follow it.