Q: The NAV as of March 31/21 is 14.80 so being below 15.00 no dividend is paid. What is the rationale for DF trading in the 4.70 range recently and today is at 5.35.
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Investment Q&A
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Q: Hello, split shares have dropped quite a lot recently. Most are well below the $5 threshold (DF-$3.08, DGS-$3.50, FFN-$3.52), where monthly dividends ($0.07-0.08) are distributed. Most of the companies that are being held in split shares are bank stocks and other high quality Canadian stocks.
I am trying to better understand the risks of owning split shares. I estimate the only circumstances I would not collect dividends are when:
1) the prices of the equity inside the split shares never go back to the normal level, and
2) the dividend-paying equity inside the split shares cuts and suspends dividends.
What other risks can you think of? Do you think the risk outweighs the rewards?
Thanks
I am trying to better understand the risks of owning split shares. I estimate the only circumstances I would not collect dividends are when:
1) the prices of the equity inside the split shares never go back to the normal level, and
2) the dividend-paying equity inside the split shares cuts and suspends dividends.
What other risks can you think of? Do you think the risk outweighs the rewards?
Thanks