Contributor since: 2010
So I don't have to do the math what size portfolio were you getting those dividends from?
I have about 60K in a Taxable portfolio because I am about 3 years away from retirement and the rest is in my IRA & TSP accounts.
I have some income but not up to yours - I am trying to retire at 57 and I think I will be spot on if I can supplement with 10-15K in dividends from a larger portfolio.
Still following not sure why after reverse split, just think it can make it.
EBITDA for the 4th quarter of $9.8 million and net income for the quarter of $1.7 million ($0.11 per share) after adjusting for non-cash impairment charge of $8 million. Net cash provided by operating activities for the quarter was $3.4 million.
The Company will pay a dividend of $0.02 per common share and $0.28 per preferred share for the quarter payable on February 19, 2013 for shareholders of record as of February 11, 2013.
EBITDA for the 4th quarter of $9.8 million and net income for the quarter of $1.7 million ($0.11 per share) after adjusting for non-cash impairment charge of $8 million. Net cash provided by operating activities for the quarter was $3.4 million.
The Company will pay a dividend of $0.02 per common share and $0.28 per preferred share for the quarter payable on February 19, 2013 for shareholders of record as of February 11, 2013.
All markets have patterns and cycles.
Borrowed article from NY TIMES: Similar Cycles for Stocks
The total return, after inflation, of stocks over 15-year periods seems to be repeating the pattern it mapped out decades ago. The compound annual total real return of the Standard & Poor’s 500-stock index peaked at more than 15 percent in 1999, and has since fallen to just 3 percent. That peak was similar to the earlier peak, reached in 1964. After that 1964 peak, the stock market lost momentum and then entered a bear market. By 1979, the market had failed to keep up with inflation over the previous 15 years.
DHT does not ship dry goods not sure why its linked? Although there are issues in the market with OSG, excess ships etc...
Citigroup on Wednesday announced plans to cut 11,000 jobs and close branches in a restructuring effort that will result in a fourth-quarter charge of about $1.1 billion.
In general, preferreds have preference to dividends payments. A preference does not assure the payment of dividends, but the company must pay the stated dividend rate before paying dividends on common stock. BLUF: Yes they can reduce and even stop(pass) it and pay later. Also, see if the Convertible factor applies to you mentioned below.
Dividend payments on preferred shares ("preference shares" in the UK) are set out in the prospectus. The name of the preferred share will typically include its yield at par: for example, a 6% preferred share. However, the dividend may under some circumstances be passed or reduced.
The benefits of preferred stock include:
•High dividend yield - usually higher than common stock dividends and bond yields of comparable risk.
•Receive dividends ahead of common stock holders so preferreds have a better chance of receiving dividends if the company experiences financial problems.
•Price is much less volatile than the price of common stock.
The drawbacks of preferred stock include:
•Limited upside price appreciation. Preferreds do not track the price of the common stock one for one so owners of preferreds can miss out on a large price upside.
•Price varies inversely with interest rates. So the price of a preferred can be less than the price you paid.
•No maturity date like a bond so you are not guaranteed to recover your principal at a given date.
•Some preferreds can be redeemed (called) by the issuer if interest rates fall so your income flow from the preferred stock would stop.
Preferred stocks have some features like a stock and others like a bond. Here is list of important features to look for in a preferred stock:
•Cumulative, pays all past due accumulated dividends if dividends were stopped for a period and then resumed. But preferred dividends are paid after bond payments.
•Noncumulative, does not pay all past due accumulated dividends if dividends were stopped.
•Callable, issuer may require you to redeem the preferred stock at a given price - usually if interest rates drop.
•Not callable, issuer will not redeem the preferred stock.
•Convertible, is exchangeable for a given number of common stocks on a given date. Holders may be forced to convert share to common stock. The price of a convertible preferred is more volatile than the price of a non convertible
***(DHT issued Convertible in its stock offering mentioned above in its backstopped-equity offering - June 2013) See the conversion info above.
•Non convert able, is not exchangeable for a given number of common stocks.
Forbes had two articles on ARCC and its dividend channel had these remarks on 14 November. So what are the issues? Pending tax laws that may hurt BDCs and dividend producing stocks?
Ares Capital Corporation (NASD: ARCC) presently has a stellar rank, in the top 10% of the coverage universe, which suggests it is among the top most “interesting” ideas that merit further research by investors.
Looking back to 89 days ago, Ares Capital Corporation (NASD: priced a 22,500,000 share secondary stock offering at $16.55 per share. Buyers in that offering made a considerable investment into the company, expecting that their investment would go up over the course of time. In trading on Wednesday, bargain hunters could buy shares of ARCC and achieve a cost basis even cheaper than those buyers, with shares changing hands as low as $16.54 per share. It should be noted that investors at the secondary have collected $0.43/share in dividends since the time of their purchase, so they are currently up 2.5% on their purchase from a total return basis.
The current annualized dividend paid by Ares Capital Corporation is $1.52/share, currently paid in quarterly installments, and its most recent dividend has an upcoming ex-date of 12/12/2012. Above is a long-term dividend history chart for ARCC, which can be of good help in judging whether the most recent dividend with approx. 9.1% annualized yield is likely to continue.
Thanks for the comment.
Interesting Stock, not for the average investor - some can say the same for BDCs.
Confused on your goal with preferred shares. I have a couple but plan on converting to common shares later. In the beginning I was getting a better dividend but now it comes out to almost the same if I do the conversion into common shares and what that dividend will equal. Some preferreds you cannot convert. Also, most preferred shares follow the rules below.
Good luck to you and I'll put it on my watch list just to see what happens.
Corporations issue preferred stocks to raise cash. Although you buy or sell them the same way you trade regular stocks, preferreds are more like bonds than common stocks. Investors buy them for the steady dividends, which typically equate to 4% to 8% yields. Most preferreds pay dividends quarterly.
Unlike common stocks, you’re won’t enjoy much share price appreciation if your company comes up with a hot product. Further, in most cases, the dividend usually does not go up either.
The term “preferred” means that a firm must pay the dividends due on its preferred shares before it pays any common stock dividends. Also, in theory, if a company goes bankrupt, preferred holders have priority over common stock shareholders. However, when a company fails, both common and preferred shareholders usually get nothing.
Take Care
I agree with 1caflash, read the earnings report and you will find they are being a little more conservative in the current market and not chasing the yield spread as much. Which could mean less earnings but I think the dividend is safe.
From Report:
"I think it just means, as we've said in the past, you can't stretch for yield, and you have to be more focused than ever on credit quality and the quality of the underlying businesses that you're underwriting."
It is getting harder to have a great spread without taking on more risk. The spread simplified is how much they have to pay on debt as opposed to what they charge for loaning money. That spread has decreased some. Makes it harder to earn the bigger buck but you take on less risk which I think makes ARCC a safer bet than many BCDs out there.
They may have to do another carryover from 2012, which could equate to another special dividend next year.
Penni F. Roll - Chief Financial Officer and Principal Accounting Officer
“We have given you the estimated spillover from 2011 into 2012, and that has been disclosed as we wrapped up our tax return for 2011, which was about $0.79 per share. We have not done a final calculation of where we will be at year-end because to do a calculation of the spillover from 2012 to 2013, we will have to actually finish up the year. But, as Mike had said in his earlier remarks, we expect that we'll continue to have a spillover amount into 2013. But at this point, that number hasn't been finalized.”
Read the earnings report and especially the earning call transcript. The question and answer sessions are interesting. Not to insult anyone’s intelligence but at first you may or may not understand them and at times read between the lines a little. It does give you a sense of where the company is headed and thinking. Realize they are reacting to a past quarter and giving forward-looking statement. It is still good to do and while I am far from any analyst it will give me a sense of the company and I’ll feel better or worse about the investment I am holding which could lead to a sell, or buy. I am comfortable where the company is at, especially considering the current market conditions.
Well that last post did not take very well.
For the quarter ended September 30, 2012, Ares Capital reported GAAP net income of $136.6 million or $0.59 per share (basic and diluted), Core EPS(2) of $0.42 per share (basic and diluted), net investment income of $89.5 million, or $0.39 per share (basic and diluted), and net realized and unrealized gains of $47.1 million or $0.20 per share (basic and diluted).
Net income can vary substantially from period to period due to various factors, including the level of new investment commitments, the recognition of realized gains and losses and unrealized appreciation and depreciation. As a result, quarterly comparisons of net income may not be meaningful.
Ares Capital Corporation (ARCC


) announced that its Board of Directors has declared a fourth quarter dividend of $0.38 per share and an additional dividend of $0.05 per share, both payable on December 28, 2012 to stockholders of record as of December 14, 2012. SEPTEMBER 30, 2012 FINANCIAL RESULTS Ares Capital (ARCC


) also announced financial results for its third quarter ended September 30, 2012.
I agree and appreciate the comments - a lot of variables and COAs that can happen at this time.
Nov 1 (Reuters) - Overseas Shipholding Group Inc's warning that it may file for bankruptcy protection has companies that lease ships to the world's No. 2 tanker operator scrambling to find alternative customers and writing down the value of their OSG contracts.
Nearly 35 percent of OSG's 112-vessel fleet is leased, with contracts ending between 2013 and 2018.
"We are in contact with willing alternative operators should OSG fail to retain the bareboat charters, but we think this is an unlikely outcome so far," said Leigh Jaros, chief financial officer of Oslo-based American Shipping Company ASA, which has leased 10 tankers to OSG.
The book value of those tankers was about $932 million in the second quarter.
OSG, which has a stock market value of about $36 million, said last week that it was evaluating options including filing for bankruptcy protection as a result of a tax issue that could force it to restate results for at least the last three years.
OSG's main credit line, a $1.5 billion fully drawn facility, is set to expire in February, leaving it with few options other than to restructure, shipping and restructuring experts said.
The troubles at New York-based OSG could also ensnare Diamond S Shipping, backed by billionaire Wilbur Ross, which has eight vessels on lease to the company.
"The issue is that those charters (with OSG) were calculated as being good cash performers for Diamond S Shipping," said Paul Slater, chief executive of financial consulting firm First International Corp, which helps companies operate under the protection of a bankruptcy court.
Any loss of OSG charters could also affect the delivery of eight new Suezmax, or mid-sized tankers, that Diamond has ordered from South Korean yards, Slater said.
Deliveries were to have started in 2012, according to the private company's website.
OSG spin-off DHT Holdings Inc has already written down the carrying value of its fleet by $92.5 million, citing the four ships it has on charter to OSG as well as weak market conditions.
"With so much uncertainty about our future cash flow due to the OSG situation, we are going to play it very cautiously in the near future," Eirik Uboe, DHT's chief financial officer, said on a post-earnings conference call last week.
Daily rates for DHT's tankers chartered to OSG range from $20,700 to $33,500.
Companies that have leased ships to OSG said it had not defaulted on payments and that no charters have been withdrawn.
"The vessel charters are performing as per the terms of the time charter party," Diamond S Shipping Chief Executive Craig Stevenson told Reuters in an email.
DHT Chief Executive Svein Harfjeld said OSG had not sought to renegotiate any charter contracts. "They are current on payments to us," he said, while declining to speculate on how an OSG bankruptcy would affect his company.
OSG can cancel its charter-in contracts -- those that cover vessels a firm leases, as opposed to those it charters to others -- once it filed for bankruptcy, restructuring experts said.
"Charter-in contracts are an enormous problem in shipping companies these days," said Albert Stein, managing director at AlixPartners, a restructuring firm. "They can hold up the restructuring process."
Citing the example of Danish shipping group Torm A/S , First International's Slater said OSG would have to renegotiate chartering contracts for any reorganization to be successful.
Torm, which mainly operates dry bulk vessels, said last month it had renegotiated contracts with shipowners to align charter rates with market levels or had arranged to cancel them.
OSG would likely cancel the 10 ships it has chartered for its U.S.-flag fleet, Slater said.
Those ships are chartered from a unit of American Shipping Co, and were earning an average of $57,800 per day as of June 30, according to an OSG regulatory filing.
Kirby Corp, which has replaced OSG in the Dow Jones Transportation Average, has expressed interest in this fleet.
"We are watching the OSG fleet ... They control equipment which certainly is very attractive," Kirby Corp CEO Joe Pyne said on a post-earnings call last week.
OSG's shares have tumbled more than 80 percent in the past month. The stock, which traded for as much as $88.57 in 2007, closed at $1.12 on the New York Stock Exchange on Wednesday
Nov 1 (Reuters) - Overseas Shipholding Group Inc's warning that it may file for bankruptcy protection has companies that lease ships to the world's No. 2 tanker operator scrambling to find alternative customers and writing down the value of their OSG contracts.
OSG's main credit line, a $1.5 billion fully drawn facility, is set to expire in February, leaving it with few options other than to restructure, shipping and restructuring experts said.
OSG spin-off DHT Holdings Inc has already written down the carrying value of its fleet by $92.5 million, citing the four ships it has on charter to OSG as well as weak market conditions.
"With so much uncertainty about our future cash flow due to the OSG situation, we are going to play it very cautiously in the near future," Eirik Uboe, DHT's chief financial officer, said on a post-earnings conference call last week.
Philip Mause SA Contributor on 10 Oct wrote: BDC Review Redux Part II: 6 Companies In Recovery:
Ares Capital (ARCC) (14.73) (17.33) (9.1%) - ARCC was never really in trouble itself but it acquired Allied Capital at a time when there were still concerns about Allied's leverage and other problems. ARCC was therefore heir to a set of assets facing serious write down potential. The Allied acquisition made ARCC one of the largest BDCs and it is a favorite holding of those who participate in the sector. NAV per share has increased modestly from $15.28 to $15.51 and the Allied Capital write downs appear to be in the rear view mirror now. The dividend is reliable although it may jump around a small amount depending upon quarterly income. ARCC seems to have resolved transitional issues associated with the Allied Capital takeover and should be a solid, reliable investment for a dividend oriented portfolio.
I am long all of these stocks because I think that there is still latent asset value and there may be ways of using financial engineering to lead to its reflection in stock price.
Thanks Wayneseek for the comment good to hear.
Thanks Rich, I like those numbers. Looking forward to the earnings report.
Thanks for the comment - good point, should have watched my wording. I was making an argument to add dividends stocks to your investment much like bonds in that paragraph and it did not transition very well. Although some BCDs do pay monthly.
If you look at its dividend across those years I would say it's been pretty consistent considering we are talking about 32 payouts and you mention two cuts and figure the average payout.
There are many ways to approach your argument and can even name a few others to include any stock that would could be in the same circumstance but not pay the same dividend. Really don't even want to go there I'm looking forward otherwise I would focus on the S& P above 1,400 back in 2006 and the DOW above 14,000 in 2007.
BDCs seldom disclose much information about the companies in which they invest, making it difficult to assess risk. Evaluation comes mostly from the company's track record that you mention.
Correction: ARCC to announce Q3 earnings Before Market on 5 NOV NOT 4 NOV
ARCC Earnings Conference Call at 1:00 PM 5 Nov
I would not say dubious viability, with the tightening of credit banks are less likely to give loans to companies that they would have before. However, I agree that some would not get the same approval and seek BCDs such as Ares. Hence, they can charge a larger interest rate. Similar to what bond markets do. If you are looking for higher yield bonds, you are going to take on more risk. Its why Fitch Ratings has assigned a rating of "BBB" to Ares of unsecured convertible notes.
Again, this is not a short-term play for me but one I would stick around during an improving economy until ARCC proves differently. If banks start to loan out money more readily than ARCC could have to take on more risk to keep profits up on higher interest loans – that could be a risk and one you should watch out for when looking at the ratings. Also in a improving economy there are more small and midsize companies seeking loans so more oppertunity with better companies.

In the past five years, ARCC had above average volatility for the Asset Management and Custody Bank industry and the company did not consistently turn a profit. Its capital resources total 5.2 Billion of which 60.3% is equity and 39.7% is attributed to debt. However, over the last year ARCC’s revenue experienced higher growth than nearly any company in the Asset Management and Custody Bank industry and there was an apx. A 31% improvement over the previous year.
I guess my point is at the current time I do not see must risk hence the article and my recent purchase of shares. I will grant you that not all analyst are pro the stock and there is a bearish tendency currently held against the stock based on Fidelity’s equity summary score. The Equity Summary Score provides a consolidated view of the ratings from a number of independent research providers on Historically, the maximum number of providers has been between 10 and 12.
Going back to my previous point I am not bearish on the stock so currently I see my Risk to Reward more on the Reward side.

In for a penny, in for a pound.

I may have to do some dollar cost averaging if I continue to hold for the long term.
Good points, using the term tax was not the right word. More of an "accounting measure." It is discussed in Note 5 of their statement. Still they discussed the possibility of going back to using 25 years not 20 at a later time as stated below.
Svein Moxnes Harfjeld - Chief Executive Officer
Just on your first question, we are not privy to any other information with respect to OSG than what the market has been informed about. So let's be clear on that. I think, in general, on the impairment, the non-cash impairment charge, it is largely driven by IFRS accounting rules and thereby, considering the general market environment. And the one key in this analysis is to reduce the expected life of the vessels under depreciation line from 25 to 20 years. And then, as I mentioned, it's really then adjusting also for a potential loss of the bareboat revenues in particular with -- for the 2 Suezmax vessels.
Jonathan B. Chappell - Evercore Partners Inc., Research Division
Okay. Last question just for Eirik. The D&A run rate, obviously, you cut the lifespan of the vessels from 25 to 20, so the $10.6 million in the third quarter, is that the run rate to be used going forward?
Eirik Uboe - Chief Financial Officer and Principal Accounting Officer
John, I think it's actually not -- Q3 was a special quarter because we have to assume that their life was to reduce orders from July 1. But of course, at the end of the quarter, we did the impairment charge and wrote down the book values. So going forward, we have estimated the run rate depreciation to be about $7.5 million.
Later he Said: And we deemed that in the very low freight markets we're in today, we will see vessels being retired at a younger age on the average than during a high market. So we have taken it down from 25 to 20. That's an assumption now, but it could be a scenario where when the market recovers, that we will back it up to 25 again. And this is -- it's quite frankly dictated by the accounting standards.
Roger, I don't think they will raise for awhile -year or more. They talked about preserving cash in the earnings call. Until the markets change they will stick with this. The said it was lowered in order to preserve capital and allow for future growth. (div $0.02 x 4 quarters /price) or 1.6% not much for the risk.
I don't think they have as many as you are discussing. I am tracking the two significant vessels are the New Capital and the London. Which could have an affect on DHT if OSG files bankruptcy. However, OSG is current on payment for all charters to DHT. So they will have to absorb any future impact - hence the $0.02 dividend despite $70 plus million on hand - my opinion. But true not a good situation to be in and puts a huge burdon overshadowing DHT. I am still going through the earning call.
EBITDA for the quarter was $7.3 million and a net loss for the quarter of $4.2 million ($0.27 per share) and/or ($0.32 per share) after adjusting for a non-cash impairment charge of $92.5 million. Not as good as we were hoping for but the OSG saga seems to still be an issue with the longer term contracts and their ability to pay in the future. I am looking for a transcript of the earnings call and hope to post more information. You can find the report on their website.
You believe DHT has little hope of survival? OSG or Both?
tankRgrrl101 - I appreciate your dedication. However, even though I would consider myself bullish at this point I would want more information before I can recommend buying anymore shares. I am still holding my current shares and do not feeel I need to sell. If this works out well than DHT could very well be oversold and this becomes a good buying opportunity. You seem to be there now.
In two more days, DHT will have its Q3 2012 Earnings Release. It will be interesting how they discuss the issue. While OSG did have contracts with DHT I thought, most were returned. What I am wondering is how much does OSG still owe DHT in accounts Payable. I was looking at DHTs receivables but could not discern who and what amount still owed as this is backwards reporting.
This is just some quick research below and would like any more information or comments you all may have.
(Reuters reported this morning- Debt-laden Overseas Ship holding Group Inc (, the world's No. 2 independent tanker operator by fleet size, said it was evaluating options including filing for bankruptcy protection and may have to restate results for at least three years. Shares of the company, which had estimated debt obligations of $2.24 billion as of June 30, fell as much as 66 percent to a life low of $1.02 on Monday morning.
Separate from the Reuters Article:
DHT itself reported in its second quarter statement in June 2012 that six of the Company’s 10 vessels are on charter, pursuant to either time charters or long-term bareboat charters. The long-term bareboat charters are to Overseas Shipholding Group. However, they also discussed OSG redelivered two time chartered-in VLCCs, the DHT Regal and the KHK Vision, to their owners and others since. The Aframaxes Overseas Rebecca and Overseas Ania were also redelivered under their time charters to DHT and subsequently sold during the quarter. DHT incurred a loss of $1.4 million on the sale of the two vessels in the second quarter. A loss of $0.9 million related to the Overseas Rebecca was recorded in the first quarter 2012. The proceeds from the sales were used to further reduce the outstanding debt under the RBS credit facility. The Aframax DHT Sophie was redelivered under its time charter in June 2012. The vessel is trading in the spot market with the intention to enter into a pool during the second half of 2012. DHTs fleet of six VLCCs, two Suezmaxes and two Aframaxes. Four of the vessels are on time charters, two are on long-term bareboat charters, four are operating in pools and/or the spot market.
They also reported; our charters to OSG and its affiliates begin to expire in 2012 and we may not be able to re-charter or employ our vessels profitably. The charter periods for the seven Initial Vessels on charter to OSG can, in OSG’s sole discretion, be extended for additional one-, two- or three-year periods. With regards to DHT Regal, Overseas Ania and Overseas Rebecca, we have been notified by OSG that the charters will not be extended at the expiry of the initial charter periods in April 2012. We cannot predict whether OSG and its affiliates will exercise their extension options under one or more of the remaining time charters. The charterers do not owe any fiduciary or other duty to us or our stockholders in deciding whether to exercise the extension options, and the charterers’ decisions may be contrary to our interests or those of our stockholders.
DHT remained unchanged while everything was tanking. It is interesting if you look at the correlation recently between the S&P and DHT. FRO, NAT, OSG were all down. Signs of DHT being oversold or just knowing when to hold onto a decent dividend?
Interesting Article concerning DHT.