Some believe this is foreshadowing a potential dividend cut in 2023 for
PDI. It's cost of money has risen so much that something has got to
give.
My thoughts exactly - interest rate rises from 1% to 5% have to catch up to them at some point, forcing a div cut - cost of leverage has skyrocketed in two yrs.
With a current yield of 13%, it probably won't be a
crushing cut. PDI will still pay something healthy. But it may prove
prudent to wait for that moment - and to let long-term rates top out
once and for all - before one is to consider re-adding PDI . The current scheduled rates path evaluation could be projecting a March /April Top.
I'm not going to even look at getting back into PDI until the Fed stops raising rates - but haven't they said they're going up another 1% in 2023? It would be quite a shock to the market if they raised 1% more by April - house sales and mortgage originations would come to a total halt.
I looked at the last 3 months of PDI's numbers in Excel and they're not pretty, trend is awful - not sure I've ever seen a rolling coverage ratio as low as 40% - that's really ugly and certainly not sustainable:
| Fund
Name |
Ticker |
Current
Fiscal
Year End |
Estimated Fiscal
Year to Date Net Investment Income (NII)(1) |
Estimated Undistributed
Net Investment
Income -
UNII/Estimated (ROC)(1) |
Estimated 3
Month Average
Net Investment
Income (NII) |
Monthly
Distribution
per Common
Share(2) |
3 Month Rolling Coverage Ratio(3) |
6 Month Rolling
Coverage
Ratio (3) |
Fiscal Year
to Date Distribution Coverage
Ratio(4) |
|
| Dec |
PDI |
30-Jun-23 |
$1.13
|
$0.00 |
$0.09
|
$0.220500 |
40.00% |
85.26% |
88.93% |
|
| Nov |
|
|
$1.01 |
$0.71 |
$0.15 |
$0.220500 |
66.22% |
96.46% |
93.51% |
<==special 65 cent div paid on Dec 22 - was 6 cents of the
Dec regular paid from UNII? |
| Oct |
|
|
$1.05 |
$0.98 |
$0.25 |
$0.220500 |
113.93% |
127.37% |
120.73% |
|
