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  • Mortgage REITs higher as American Capital and Annaly maintain dividends; rates slip [View news story]
    William,


    "But here is the deal.. taxable income is not what the dividend will be based on. IF you listen to the conference call - Gary says that it will not be based on taxable income. I see no reason to add roll + taxable income together."

    You got that incorrect. Gary was saying that the dividend will NOT be based ONLY on taxable income as in the past. ERTI + UTI.

    He did not mean that they would NOT use ERTI at all, he meant AGNC would use a combination of taxable income {ERTI} and net dollar roll income ( NON TAXABLE INCOME} to pay the dividend.

    I have tried my best to explain this.
    Sep 20 12:13 AM | 1 Like Like |Link to Comment
  • Mortgage REITs higher as American Capital and Annaly maintain dividends; rates slip [View news story]
    ERTI is still important, it is taxable income. As you know they are using the net dollar roll income to offset carryforward losses and they get to use it to meet the dividend.
    Sep 20 12:06 AM | Likes Like |Link to Comment
  • Mortgage REITs higher as American Capital and Annaly maintain dividends; rates slip [View news story]
    Gary Kain:

    "Dollar roll income therefore nets against the accumulated tax loss carry forward which allows us to utilize that benefit more rapidly and reduces taxable income in our current period earnings.

    Assuming we continue to make significant use of dollar rolls, this difference in tax treatment between dollar rolls and MBS pool positions will have significant implications for our taxable earnings outlook versus both our GAAP earnings and versus our true economic earnings as well.

    To this point, taxable earnings as well as UTI will become less relevant in understanding our financial performance and our capacity to pay dividends. For this reason, we will likely deemphasize taxable earnings as a supplement non-GAAP measure in the quarters ahead.

    Now it’s important to understand that the tax versus GAAP differences created by dollar roll income will not impact our decision with regard to where we set our dividends. As we have said many times in the past, we determine our dividend based on our view of the all in economics earnings power of our portfolio and not based on earnings geography.

    If we can utilize our capital loss carry forward by generating capital gains via dollar rolls, we can in essence pass along that tax benefit to our shareholders by continuing the base of the dividend amount on the economic earnings power of the portfolio and changing the tax characterization of our dividend from ordinary to return of principal."
    Sep 20 12:01 AM | 1 Like Like |Link to Comment
  • Mortgage REITs higher as American Capital and Annaly maintain dividends; rates slip [View news story]
    Gary Kain " I should reiterate something that we have stressed many times in the past. Net spread income for what many analysts refer to is core income has shortcomings and is not a complete measure of the true earnings power of our portfolio. It is based on the historical cost basis of assets and swaps and not their current yields. It also does not capture the cost associated with treasury swaptions or forward starting swaps as such we continued to be more focused on economic earnings."

    William, I have called AGNC and spoken with them, they will be using net dollar roll income + ERTI to cover the dividend.
    Sep 19 11:47 PM | 1 Like Like |Link to Comment
  • Mortgage REITs higher as American Capital and Annaly maintain dividends; rates slip [View news story]
    William,

    ERTI = .28 cents

    Net dollar roll income = .39 cents

    That = .67 cents as Scott stated.

    Your .87 cents is Net dollar roll = .39 cents + net spread = .48 cents which = .87 cents

    You might feel that the spread income + net dollar roll income is the meaningful earnings to support the dividend. Scott is saying that the ERTI + the net dollar roll income currently is the important metrics to support the dividend.

    So you have a different opinion, however you stated Scott was incorrect, he was correct not ONLY in his statement above but also in his projected dividend. I noticed you were wrong in your projected .75 cent dividend that I saw on stock talk yesterday.
    
    I will have to use Scott's numbers.
    Sep 19 11:09 PM | Likes Like |Link to Comment
  • Mortgage REITs higher as American Capital and Annaly maintain dividends; rates slip [View news story]
    William,

    American Capital Agency Corp. Reports $2.43 Comprehensive Income Per Common Share And $26.26 Net Book Value Per Common Share

    PDF Version

    To download financial tables, please click here.

    P>BETHESDA, Md., July 28, 2014 /PRNewswire/ -- American Capital Agency Corp. ("AGNC" or the "Company") (Nasdaq: AGNC) today reported comprehensive income for the second quarter of 2014 of $862 million, or $2.43 per common share, and net book value of $26.26 per common share. Economic return for the period, defined as dividends per common share plus the change in net book value per common share, was a gain of $2.42 per common share, or 9.9% for the quarter, or 39.6% on an annualized basis.
    SECOND QUARTER 2014 FINANCIAL HIGHLIGHTS

    $2.43 comprehensive income per common share, comprised of:
    $0.08 net income per common share
    $2.35 other comprehensive income ("OCI") per common share
    Includes net unrealized gains on investments marked-to-market through OCI
    $0.87 net spread and dollar roll income per common share
    Includes $0.39 per common share of dollar roll income (also referred to as "drop income") associated with the Company's $14.0 billion average net long position in agency mortgage- backed securities ("MBS") in the "to-be-announced" ("TBA") market
    No "catch-up" premium amortization recognized for the quarter as projected constant prepayment rate ("CPR") estimates were largely unchanged from the prior quarter
    ****** $0.28 estimated taxable income per common share ***********
    Excludes $0.88 per common share of net capital gains (including $0.39 per common share of TBA dollar roll income) applied against prior year net capital loss carryforward
    Sep 19 10:58 PM | Likes Like |Link to Comment
  • Mortgage REITs higher as American Capital and Annaly maintain dividends; rates slip [View news story]
    Hi William,

    Scott Kennedy was correct as he stated

    "To be more "technically" correct, AGNC had ERTI of $0.28 per share and ERTI and net dollar roll of $0.67 per share last quarter. "

    See the news release from AGNC's web site: http://bit.ly/1tnpQ1a;

    $0.28 estimated taxable income per common share

    Includes $0.39 per common share of dollar roll income (also referred to as "drop income") associated with the Company's $14.0 billion average net long position in agency mortgage- backed securities ("MBS") in the "to-be-announced" ("TBA") market

    The $0.87 figure you are referring to was:
    $0.87 net spread and dollar roll income per common share
    Sep 19 10:16 PM | Likes Like |Link to Comment
  • Altria Group Could Receive A Multi-Billion Dollar Payoff As SABMiller Plc Is In Play Once Again [View article]
    Hi pickles,

    I understand your thinking, however when it comes to MO, I reinvest every penny. I am not going to get cute when it comes to the #1 DIVIDEND MACHINE in the history of the stock market. MO will make you more money than you think it will over the next 30-40 years. If I was in my mid 20's and had a clue, I would have taken 10K a one time investment and it would be worth 3.2M + today. From 1983 to 2014 MO has returned 20.4% on average per year. Put that in your pipe and smoke it. LOL

    That is a one time 10k investment 31 years ago would be worth over $3M today at 20.4%, probably more with reinvestment.

    You got it made in the shade. I am going to write an article comparing MO to AAPL stay tuned.
    Sep 19 07:41 PM | 1 Like Like |Link to Comment
  • UPDATED ! I Am Selling MCD And Replacing With ? In My Dividend Growth Portfolio. [View instapost]
    I wanted to increase the income to this portfolio and since I am actively managing this portfolio I decided it was a good decision as income is the priority. I will explain more in my upcoming article.
    Sep 19 12:35 PM | Likes Like |Link to Comment
  • I Recently Increased My American Capital Position, Should It Be In Your Portfolio? [View article]
    Hi Rob,

    I appreciate your information. I will continue to add if AGNC goes below $22 prior to the ex-date, however it appears the trend is higher for now. I will determine an entry point after the ex-date.
    
    Sep 19 12:25 PM | Likes Like |Link to Comment
  • I Recently Increased My American Capital Position, Should It Be In Your Portfolio? Update [View instapost]
    Hi maybenot,

    Thank you for your kind words. I have submitted my latest article on AGNC. I hope to have it published soon.

    See my latest blog for another update.'

    Thanks for your positive feedback.
    Sep 19 11:54 AM | Likes Like |Link to Comment
  • I Recently Increased My American Capital Position, Should It Be In Your Portfolio? [View article]
    Hi Rob,

    AGNC is moving higher today. I expected they would move higher after hours yesterday when the $0.65 dividend was announced. It just goes to show how AGNC investors are slow to react to good news in this current "skiddish" environment. Once the news sank in AGNC started going higher as I had anticipated.
    Sep 19 11:23 AM | Likes Like |Link to Comment
  • I Recently Increased My American Capital Position, Should It Be In Your Portfolio? [View article]
    Hi Rob,

    Good point. I bought at a solid entry point, not necessarily the best entry point. I wanted to lock in a solid entry point. It has served me well in the past.

    Be well. 
    Sep 19 11:17 AM | Likes Like |Link to Comment
  • I Recently Increased My American Capital Position, Should It Be In Your Portfolio? [View article]
    Hi Alpha_Vega,

    Thanks for your comment. I believe your strategy has worked well the large majority of the time in the past. It might or might not continue to work in the future.

    Thanks for sharing your strategy. I felt AGNC has been on sale all week and bought when I saw the large discount to book value. You might be right regarding a better entry point, however I know I will not always catch a bottom. As long as I get a solid entry point I will do well in the long run.
    Sep 19 11:10 AM | Likes Like |Link to Comment
  • I Recently Increased My American Capital Position, Should It Be In Your Portfolio? [View article]
    Hi Rob,

    Absolutely, did you see my blog? I just submitted a new article on AGNC. I am loading up once again. Are you buying AGNC?
    Sep 18 11:42 PM | Likes Like |Link to Comment
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