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Strategies & Market Trends : Dividend investing for retirement

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To: maverick61 who wrote (32804)	6/4/2020 12:36:42 PM
From: E_K_S	Read Replies (3) of 34328

a 2% yield is going to look incredible if we get into negative rates. It is a very small probability but possible IMO. As a speculation, I also picked up SOHOB Southerly Hotels 8% preferred. I have followed SOHO common for several years since Steve first mentioned it here on this thread. I sold my common shares in late 2018 but have watched the stock at they expanded into the Florida market. The are a small cap REIT destination hotel owner and in their new development in FL also have restaurants/convention services. All that fell off the cliff w/ Cobad-19 and the company suspended their dividends (including their preferreds). My speculation is that this will impact the company through Q3 and maybe q4 depending on if/when they can open up their hotels and if people travel again. The company could burn cash and BK and/or be sold at a discount leaving preferred share owners w/ nothing. (Not sure if there is a change of ownership clause covenant for preferred debt) On the flip side, it looks like their FL property is opening up slowly and management can learn what is required for their other 3 properties. Their SOHOB 8% preferred is a cumulative dividend payer, so dividends accrue in the rears. I bought some of the SOHOB around $8/share for a 25% div yield (being accrued and a possible 235% annual return if called 8/2021). Could that ever happen? Yes if we go to negative rates, their 4 properties are opened and get back to at least 65% occupancy AND the company can refinance their debt to 3% (or lower) and/or they get acquired and preferred shares are called and paid off. Another possibility is BK and assets are sold/acquired in a bank foreclosure leaving shareholders and debt holder w/ nothing. FWIW, SOHOB last $11.05/share +37% from my buy and that 25% dividend is being accrued. I like the risk/reward especially w/ my understanding of the assets, their destination resorts and FL operation starting to open up. FWIW, over on the income forum, I was lambasted for a terrible call and this company was going BK. For me it is Risk vs Reward and my position quite small w/ a 2.3x upside. Good Investing EKS

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