This investment trusts invests primarily in US equities that are in the S&P 500 index. It is managed by Aberdeen Standard Investments.
5 year share price gain 31%
Dividend 3.25%.
Prior to COVID increasing its dividend by 9% (average) with very good cover. COVID years 5% excellent cover
This year 3% covered.
8% discount. Never used any of its dividend reserve since changing its remit to income equity 10years ago.
Henderson far east
5 year Share price loss 25%
Dividend 8.3%
Dividend increases around 3% a year.
Reasonable but not great dividend cover.
Premium 3%
This is an example of the rule,
not linear but accurate a lot of the time.
The higher the dividend the lower share price gain and the lower the dividend growth.
Just noticed its shot to the top of the table over 1 year. Although the sector isn’t really an income sector. In fact there isnt really one for North American income. Blackrock has changed its strategy that could of been a comparable trust but there is none now.
Still on a discount of 8% has been for years so don’t buy with tha assumption that it will narrow.
4 quarterly dividend not of equal amounts. First 2 this year are up 31%. I can only assume they are making an attempt at evening them out.
Update first 3 dividends are 2.5p final is expected to be at least 3.1p
Issued loan notes at reasonable interest rates
"In December 2020, NAIT issued a $25m 10-year senior unsecured loan note at an annualised interest rate of 2.70% and a $25m 15-year senior unsecured loan note at an annualised interest rate of 2.96%. The loan notes are unsecured and unlisted and interest is payable in half yearly instalments in June and December. They are due to be redeemed at par on 21 December 2030 and 21 December 2035.
The total fair value of the loan notes at 31 January 2022 was £41,348,000 comprising £20,065,000 in respect of the 10-year loan and £21,283,000 in respect of the 15-year loan. The proceeds of the loan note were used to repay and cancel in full the $75m revolving credit facility (RCF)."
So all debt is fixed (unless they borrow more) no way of paying back when it suits them unlike a revolving credit. On the other hand the interest rates are less than the dividends so should have no problems paying the interest. You would expect by the time they are redeemable that capital gains and dividends would make it easy to pay back.
Don’t own. Online presentation
Some interesting facts.
1936 -2023 dividends were 37% of total returns
2013-2023 dividends were 17% of total returns.
A product of very low interest rates.
Therefore we are back in a value orientated era?
The recent rise in growth shares suggest not quite. It is noticeable though that the growth companies that have risen again are highly profitable so called quality companies.
As they say in the online presentation if they paid dividends it would imply that they are struggling to find high growth investments for their capital.
Anyway the rise in interest rates should at least mean a re-rating of value?