matisse capital management

And More Companies Raising Dividends - 10/31

    ADC, Agree Realty Corp., from $0.50 to $0.51, quarterly; yield = 8.7%

    DHF, Dreyfus High Yield Strategies, from $0.03 to $0.035, monthly; yield = 12.1%

    DIT, Amcon Distributing, from $0.10 to $0.18, quarterly; yield = 1.2%

    NIDB.OB, Northeast Indiana Banc., from $0.165 to $0.17, quarterly; yield = 5.9%

    MSEX, Middlesex Water, from $0.1775 to $0.18, quarterly; yield = 4.7%

    PRGO, Perrigo Co., from $0.055 to $0.0625, quarterly; yield = 0.7%

    STRA, Strayer Education, from $0.50 to $0.75, quarterly; yield = 1.5%

Predictions of a Commercial Property Crash

Wilbur Ross, billionaire investor and member of the Committee on Capital Markets Regulation, believes the US is at the beginning of a "huge crash in commercial real estate."  Will this necessitate the creation of another Resolution Trust Corporation by the government (RTC)?  You have to wonder.  From Bloomberg:

 “All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate - the return that investors are demanding to buy a property - are going up.”

To anyone in the industry, this news comes as no surprise.  Also weighing in on this issue today was  George Soros:

Moody's Calls a Housing Bottom for Mid-2010

Moody's Investors Service, in a note released Thursday, said it will boost loss projections for most U.S. residential mortgage-backed securities over the next few weeks.  However, the related comments were the most interesting part of this note: 

"...Moody's said it now expects a trough in home prices won't be reached until the middle of next year...Moody's said in addition to borrowers' financial pressure, unemployment is now projected to peak at over 10% in mid-2010 and remain in the high-single digits for two years after they peak."

More Companies Raising Dividends - 10/28

    AWR, American States Water, from $0.25 to $0.26, quarterly; yield = 3.0%

    DLR, Digital Realty Trust, from $0.36 to $0.45, quarterly; yield = 4.0%

    NMR, Nomura Holdings, resumes dividend of ¥4 per share

    STR, Questar Corporation, from $0.125 to $0.13, quarterly; yield = 1.3%

    VFC, V.F. Corporation, from $0.59 to $0.60, quarterly; yield = 3.4%

Will the US Repeat Japan's Troubles?

From the NYT: "years of stimulus spending on expensive dams and roads have inflated the country’s gross public debt to twice the size of its $5 trillion economy— by far the highest debt-to-G.D.P. ratio in recent memory. Just paying the interest on its debt consumed a fifth of Japan’s budget for 2008, compared with debt payments that compose about a tenth of the United States budget. ...Japan’s rising sea of debt is the stuff of nightmares: the possibility of an eventual sovereign debt crisis, where the country would be unable to pay some holders of its bonds, or a destabilizing collapse in the value of the yen."  Note that Japan has been spending stimulus monies since the banking crisis of the early 90s.  It still has been unable to create a sustained period of economic growth since that time.  The US government debt is currently 98% of GDP, the highest level in decades, while EU member states are mandated to keep debt below 60% of GDP.

More Companies Raising Dividends - 10/22

    BTU, Peabody Energy, from $0.06 to $0.07, quarterly; yield = 0.6%

    DO, Diamond Offshore, special cash dividend of $1.88 per share

    FCX, Freeport McMoRan, dividend reinstated at $0.15, quarterly; yield = 0.7%

    SCL, Stepan Company, from $0.22 to $0.24, quarterly; yield = 1.5%

    SHEN, Shenandoah Telecom, from $0.30 to $0.32, annually; yield = 1.9%

    TRV, Travelers Cos., from $0.30 to $0.33, quarterly; yield = 2.6%

    UFPI, Universal Forest Products, from $0.06 to $0.20, semi-annually; yield =1,0%

Companies Raising Dividends - 10/19

    EPB, El Paso Pipeline Partners, from $0.33 to $0.35, quarterly; yield = 6.3%  

    EPD, Enterprise Products, from $0.5225 to $0.5525, quarterly; yield = 7.3%

    GEL, Genesis Energy LP, from $0.345 to $0.3525, quarterly; yield = 8.2%

    GR, Goodrich Corporation, from $0.25 to $0.27, quarterly; yield = 1.9%

    PPG, PPG Industries, from $0.53 to $0.54, quarterly; yield = 3.5%

    XLNX, Xilinx Inc., from $0.14 to $0.16, quarterly; yield = 2.7%

How Is this Recession Different?

The real unemployment rate is 17%.  The Atlanta Fed has just compared the number of employees in part-time employment with that of each recession since 1970.  And this time it is different.  Per the Atlanta Fed: "The broadest measure of unemployment, which includes all those working part-time for economic reasons as well as workers who have looked for work within the last 12 months, increased to 17% in September. The official unemployment rate (9.8%) excludes part-time workers as well as anyone who has not looked for work in over four weeks....Moreover, for the employed, average weekly hours remained low, declining 0.1 points to 33 hours in September."  Here's the chart:

Dividend News Around the World - 10/12

• The highest yielding stocks of the Dow 30. 

• A very bad quarter for dividend increases.  

• Some smart dividend plays for tough times. 

• Three 'ridiculously cheap' dividend stocks. 

• Canada's Dividend Aristocrats deliver consistently.

• Telefonica's (TEF) dividend is now over 4.0%. 

• Five stocks that have paid dividends for more than 50 years.

 

Foreclosures Rising on Higher Priced Homes

All three price segments of the housing market are converging on a similar foreclosure rate.  From Zillow and the WSJ:

"About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now account for 35% of foreclosures, down from 55% in 2006.

The prime category includes so-called exotic mortgages that were increasingly used to buy more expensive homes, including interest-only mortgages that allowed borrowers to defer principal payments during an initial period. Borrowers often aren't able to refinance out of these products because the drop in home values has left them with little equity in their homes.

Zillow estimated that nearly one in four homes with mortgages was worth less than the value of the property at the end of June."