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  • Investing In Trust Great Northern Iron Ore Equals High Earnings Potential 1 comment
    Feb 28, 2013 8:49 AM | about stocks: GNI

    Earnings per share (NYSEARCA:EPS) is one of the most important indicators of a company's profitability. Great Northern Iron Ore Properties (NYSE: GNI) gives investors a great return for their money with earnings per share at $13.58 and a yield of 21 percent. The company is a registered nonvoting Trust under the laws of the state of Michigan pursuant to a Trust agreement signed on December 7 1906. The Trust owns mineral and non-mineral properties in Northeastern Minnesota. Its properties span two counties and stretch from Hoyt Lakes on the Mesabi Iron range to the Grand Rapids of the west end of the Mesabi Iron Range. Quite a number of these properties are leased to iron and steel companies.

    In past years, the Trust has posted strong net income figures. In the last five years, year-on-year revenues have grown by between 28 percent and 31.94 percent. Like any company that solely holds properties, its income statement shows minimal expenses and thus a high profit margin of around 85 percent. The company's profitability is reflected in its earnings per share. In fact, Great Northern Iron Ore offers the highest return per share of any company listed on the New York Stock Exchange.

    While investing in Trusts provides high returns for investors in the short-term, the Trust will at some point cease to exist. In the case of Great Northern Iron Ore, when the Trust was founded, it was agreed that the Trust will terminate 20 years after the death of the last shareholders can continue looking forward to pocket more money from this stock. This is expected to happen in 2015. Investors can expect to receive the last dividend payout before all the Trust assets are transferred to its new owners.

    The stock rallied in December of 2012 in anticipation of a dividend announcement. This rally has since subsided and a general downward trend is being observed. Nevertheless, in the last dividend quarterly distribution, investors received $3.50 per share, representing a 50 percent increase as compared to the previous quarter. As the year 2015 draws closer, exciting and uncertain times lie ahead for investors. No one can predict what will happen after the final distribution date, but Trusts do tend to offer their highest earnings per share during the final days of their lives.

    Themes: iron ore Stocks: GNI
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  • Simon Chang
    , contributor
    Comments (4) | Send Message
     
    Wait, what do you mean by "No one can predict what will happen after the final distribution date..."? The stock is worth 0 after isn't it?
    24 Jul 2013, 10:23 AM Reply Like
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