Quote:
Originally Posted by Rain Man
SSW - I've lost my shirt on this ocean freighter company, with the stock down 40 percent since I bought it. But come on - it's profitable and it pays an 8.5% dividend. I've been buying it the whole way down until I reached a limit on how much I'll put into any stock. If it comes back, it'll produce some big gains and I don't see why it's down so much. I kind of want to buy more.
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Healthy companies will rarely have 8.5% dividends so that stands out right away. Unless it's something cyclical and temporary, for instance, Cal-Maine went crazy high during the avian flu thing that caused egg prices to go up. Anything much above 5ish should draw extra attention. REITs don't pay taxes and have to distribute 90+% of profits so they get big divs. The taxes are passed onto the investors because you have to pay on income instead of cap gains.
SSW has a 218% payout ratio. Just the common shares dividend seems more than income can cover. Looking at the balance sheet, they've been diluting shares which probably has caused the stock to sink.
cvgw looks nice though. Put it on my watchlist.