Manhattan Bridge Capital Boosts Quarterly Dividend Payout 9% (LOAN)
By: Ned Piplovic,
Manhattan Bridge Capital, Inc. (NASDAQ: LOAN), which currently sports a dividend yield in excess of 7%, recently announced that it will be boosting its quarterly dividend distribution for the next period by more than 9% above current rates.
At present, the company’s current dividend yield is around 80% higher than industry and sector averages. Manhattan Bridge Capital has also seen a double-digit-percentage total return over the last 12 months, and triple-digit-percentage gains over the last three and five years.
LOAN has set its next dividend pay date for April 16, 2018. The quarterly dividend of $0.12 per share will be distributed to shareholders of record prior to the April 9, 2018 ex-dividend date. Note that the amount of time between the ex-dividend and pay dates are only a week apart, a smaller time span than many other dividend-paying companies.
Manhattan Bridge Capital, Inc. (NASDAQ:LOAN)
Headquartered in Great Neck, New York and founded in 1989, Manhattan Bridge Capital, Inc. is a real estate finance company that originates, services and manages a portfolio of first mortgage loans. The company offers short-term, secured and non-banking loans to real estate investors seeking to fund their acquisition, renovation, rehabilitation or enhancement of properties in the New York metropolitan area. The loans are principally secured by collateral consisting of real estate and accompanied by personal guarantees from the principals of the businesses. Manhattan Bridge Capital qualifies as a real estate investment trust (REIT) for federal income tax purposes. As such, the company is not subject to federal corporate income taxes so long as it distributes at least 90% of its taxable income to its stockholders.
The upcoming dividend payment represents a 9.1% increase from the $0.11 quarterly distribution in the previous quarter to the $0.12 payout in April 2018. The new payout amount converts to a $0.48 annualized dividend distribution and equates to a forward yield of 7.4%. This current yield is close to 50% higher than the company’s current five-year yield average, a fact made even more impressive when you consider that the yield increased as the share price increased as well.
In addition to outperforming Manhattan Bridge Capital’s own five-year yield average, the current yield also handily outperforms industry and sector average yields. The current 7.4% yield is approximately double the average yield of the overall Financials sector and 217% higher than the 2.33% simple average of the Credit Services industry segment. Even if one excludes all the companies that do not pay any dividends, the segment’s average yield only goes up to 4.09%, which is still 80% lower than the current yield for Manhattan Bridge Capital.
Starting in the last quarter of 2004, Manhattan began distributing dividends with a $0.25 per share offering, which was then immediately increased to $0.28 the following quarter. However, the dividend was cut to $0.10 by the second quarter of 2005 and remained at that level through the first quarter of 2006. After that, the company eliminated the dividend distribution for the remaining quarters of 2006 and did not start paying dividends again until 2013. Even in 2013, though, Manhattan started payments in the second quarter and paid a quarterly dividend of just $0.01, for a total annual dividend of $0.03.
In 2014, the company accelerated its annual dividend growth rate again and has boosted the annual payout every year since. Over the past five years, the total annual dividend amount rose 12-fold, which translates to a growth rate of 64.4% per year since 2013. Even if we disregard the very low dividend in 2013, the total annual dividend amount still advanced at an average rate of nearly 30% per year and rose more than 180% over the past four years.
As for share price action, LOAN experienced some volatility and declined 22% between the beginning of the trailing 12-month period on March 20, 2017 and its 52-week low of $4.65 on April 24, 2017. However, after mid-June 2017, the share price settled into a more stable uptrend. The share price spiked to $6.30 in early July but dropped back to its longer trend price levels within two weeks and grew steadily afterwards.
Even during the overall market sell-off in February 2018, when share prices of many other equities dropped by double-digit percentages, Manhattan Bridge Capital’s share price dipped less than 5% and returned to its rising trend within one week. The share price closed on March 20, 2018 at $6.50, which is the new 52-week high and marks a total gain of 46% above the April 2017 low. The current closing price is also 13% higher than it was 12 months earlier and around 400% above its price level from five years ago.
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