02-02-2014, 09:15 PM
(02-02-2014, 06:34 PM)Dividend Watcher Wrote: You may be right.
The thing that has me befuddled is that both boards have increased dividends in the double digit percentages for a while. Even with this lousy earnings report, MAT increased their dividend 5% in the same announcement. You'd think if the boards were in "hunker down" mode, they wouldn't be so generous.
I skimmed MAT's earnings report and there are a lot of non-cash adjustments for old IP lawsuits. It really got me confused at first glance and want to look at that further.
Interestingly, in the same earnings report, they advised that all their dividends for 2013 were not considered "qualified" dividends but to be considered as return of capital. Another interesting tidbit I've never seen before. Couldn't find the reason why yet but now I need to satisfy my own curiosity.
Interesting thanks.
I do not like ROC at all as it is bad over the long term. I'm sure you know this already but ROC reduces your cost basis, and I suppose over a very long period of time, once that cost basis hits zero, then all ROC is taxable at ordinary income tax rates.
ROC is a pretty common thing for most REITS and several CEFs, but not so much with common stocks.
I wonder if MAT has always paid ROC in the past? I couldn't find any info on this. They say they expect future "dividends" to consist of over 50% ROC.