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Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: Paul F.
Date: June 16, 2021 04:08PM
I've had this stock/fund in my "watch" list for a couple years now, but, I haven't pulled the trigger because... I must be missing something here.

[finance.yahoo.com]

It pays a 14.27% dividend (I believe that's the APR), paid quarterly.

14.27% That's (currently) $8.00 a share at $55 and change a share.

Other than the obvious potential volatility of the stock price, and the management of the fund (may not KEEP earning that percentage... but, they've done well for over a decade now)...
What down-side am I missing?

No, I'm not betting the farm, and not selling all my TSLA stock or AAPL to buy IEP.... but, $14.27% is a WHOPPER of a return. Over 10 years, with dividend reinvestment, that's starting to look like real money, even if I only put in a few thousand dollars.

Seriously... what am I missing here?



Paul F.
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A sword never kills anybody; it is a tool in the killer's hand. - Lucius Annaeus Seneca c. 5 BC - 65 AD
----
Good is the enemy of Excellent. Talent is not necessary for Excellence.
Persistence is necessary for Excellence. And Persistence is a Decision.

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Eureka, CA
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Re: Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: pdq
Date: June 16, 2021 05:21PM
Essentially no appreciation over the past five years; shows a loss of 46 cents a share over the last 12 months.

Why would it be losing money in the current environment? How long can it keep paying eight dollars a share in dividends when it’s not making any money?

Not saying it’s a bad idea, only that that’s what I see.
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Re: Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: Ombligo
Date: June 16, 2021 05:28PM
[1.simplysafedividends.com]

a couple of excerpts --

Quote

Icahn Enterprises’ Dividend Safety Score of 33 suggests that its distribution is unsafe and could be cut or suspended at some point in the future.
The company’s low score doesn’t come as a surprise given the MLP’s historically volatile distribution (a kind of tax deferred dividend).


Quote

unless Icahn’s returns’ improve drastically in the coming years (which is largely dependent on the whims of a fickle stock market and unpredictable commodity prices), Icahn Enterprises’ distribution could be wiped out within a quarter or two should (Carl) Icahn ever decide to receive his payout in cash.

Given his advanced age and absolute control over the MLP, anyone owning this stock is trusting he will never do that. However, whether his managers will continue this policy of being paid in new units after he’s gone cannot be predicted.

Quote

Until the partnership can start to show consistent profits and cash flows, enough to make the payout sustainable, Icahn Enterprises is probably best avoided no matter how low the price or how high the yield.

The S&P also cut Icahn Enterprises’ credit rating to junk last year.



“No persons are more frequently wrong, than those who will not admit they are wrong.”
-- François de La Rochefoucauld

Growing older is mandatory. Growing up is optional.
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Re: Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: space-time
Date: June 16, 2021 05:33PM
If it’s too good to be true…
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Re: Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: Steve G.
Date: June 16, 2021 05:48PM

Bernie says 'HI!
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Re: Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: Lux Interior
Date: June 16, 2021 06:12PM
I've held some REITS that paid dividends like that.

You don't get much capital appreciation, though.

Vector Group paid a nice dividend for a while.
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Re: Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: NewtonMP2100
Date: June 16, 2021 06:17PM
.....the best is......Father's little Dividend......



_____________________________________

I reject your reality and substitute my own!
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Re: Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: Buzz
Date: June 16, 2021 08:57PM
My Covid dividend plays were DOW at $40 and SPG (REIT) at $62, and w/ dividend reinvestment, the cash on cash yield is well north of 8%. At this point, appreciation is off the charts, and while both stocks recently had cut their dividends, I'm betting both will be raising their dividends back to at least pre-Covid levels within a year, and that'll jack the cash on cash yield over 10%. Both seemed like strong long term holds last summer, and still seem that way today. Part of me wishes that I had the foresight to go bigger on those buys, but Biff's postdated Sports Almanac always generates those thoughts.... then I realize that I don't wanna end up like Biff, so just gotta be happy as is.

That 14.3% seems kinda risky... it's not a basket I'd put a lot of eggs in. If I had a bunch of unproductive eggs laying around, and could afford to toss one in that direction, as a flyer, yeah, maybe. Doesn't seem like a frittata I'd take too many bite out of.
==
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Re: Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: Forrest
Date: June 16, 2021 09:14PM
Carl Icahn is thinking investing about 1.5 Billion in cryptocurrency. Too risky for me.

If you want a reliable dividend, stick with those companies on the Dividend Aristocrats list.
Link

Note AT&T is the highest on the list, but they just announced they are cutting their dividend, so they will be dropped from the list once that happens.



Edited 1 time(s). Last edit at 06/16/2021 09:15PM by Forrest.
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Re: Speaking of investments... what am I missing here (14.3% Dividend)
Posted by: Bill in NC
Date: June 17, 2021 12:19PM
plenty of articles over on seeking alpha dot com pump this investment or other for its high single or low double-digit yield.

then in the comments people point out the lousy coverage ratio or plunging stock price...
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