Shares of Data Group (OTCPK:DGPIF) have a dividend yield of nearly 20%. In this low-rate environment, Mr. Market is making it clear he does not believe in the sustainability of this dividend. While Data Group has proven itself to be a cash cow, because of the company's debt load, Mr. Market may be right.
But investors don't have to take the downside risk associated with the company's equity, because the company's debt (DGI.DB.A) is trading at a massive discount to par. Data Group's debentures trade at just 58 cents on the dollar (as of Tuesday's close), providing an upside of over 100% should the company make good on these obligations due in 2017.
Data Group provides...