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Non-Tech : Kellogg
K 83.440.0%Dec 11 4:00 PM EST
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To: bruwin who wrote (14)1/15/2021 2:23:47 PM
From: Jon Koplik1 Recommendation

Recommended By
Neeka

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bruwin -- my quick response : (probably) everything you say is indeed exactly correct, BUT .............

One thing that occurs to me :

The yield on Kellogg debt is below the dividend yield.

Using the bond search function in a certain "leading U.S. brokerage firm" website,

a buyer (right now) would receive a yield to maturity of :

around 1.74% for Kellogg 7.450% bonds due 04-01-2031 (trading around 153 cents on the dollar)

and

around 2.87% for Kellogg 4.500% bonds due 04-01-2046 (trading around 129 cents on the dollar)

Both of these yields to maturity are lower than the current K div. yield of 3.87%

-------------------------

A lot of (supposedly) "really smart people" try to rationalize these types of situations.

To me -- it means (simply) : the corporation is "safe." Just buy its stock instead of its bonds.

Jon.

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