Boost your income with GOOD Gladstone Commertial almost 10% yield!

18th Mar '16 by lightningtiger

11 comments 7076 reads

With the ticker GOOD , Gladstone Commertial has consistantly paid out a $1.5 dividend PA for the last 5 years that is paid out monthly. This can be checked at dividend investor.com, Hargreaves and with Vector Vest. It went XD yesterday. Having recently sold 3 properties for $6.9M , the income stream is impressive.
They generate income from their rental properties and mortgage lending.in the REIT market.
The dividends are paid out monthly @ $0.125 per share.
It is quit easy to work out your yield . As the share price moves up and down you will get a $1.5 per share as a dividend, so at a share price of $15, that's 10% less costs £/$ rates.
At $18 it is still a healthy 8..33% less costs and £/$ fluctuations have to be taken into the equation too.. Should the share price fall to say $12.00 then the dividend works out @ 12.5%!
This is an easy way of boosting your pension income up and enjoying spending some extra dosh.
Currently the share price has been rising above the $15.00 mark. For anybody that is thinking about re mortgaging with a rate around 3% or so, it may be worth raising some extra capital to invest in this one after doing your own research.
Risks such as future dividends may not continue in spite of a 5 year track record. Share price movement and fluctuations with the £ and $ and also costs involved, but certainly worth considering.
This was discussed yesterday St Patric's Day at our investment club meeting and got some "green light"possibilities of using 3 or 4 banks to come up with the cheapest interest rate to use. All worth discussing over a pint of Guiness! Have you got the nerve or is this absurd?

Good Gladstone should not be confused with Good Energy

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Ken Lowes

18th Mar '16

Never, Never, Never, borrow to invest unless you control the whole game and there is always a reason why a dividend is high and it usually isn't good.

Rusty2

I agree, bad idea to borrow to invest in USA property. If you want a high dividend I would rather buy some preference shares such as Lloyds Bank, pay about 9.25% net in an ISA, no problems with USA tax forms and payments or rate of exchanges, probably safer also. This company maybe ok until the next recession.

lightningtiger

Firstly you need to get the right facts. Currently the graph above is not for GOOD Gladstone Commertial @ 9:24pm Friday I have requested it be rectified to Stockopedia but currently it is not done.. It is still showing GOOD Energy. Secondly you do NOT have to borrow to invest in it..

I do hold some preference Shares , but not with LLoyds. I would love to see the ticker for LLoyds paying out 9.75%. You may be mistaken about this. LLPD for lLloyds on dividend investor shows a dividend of 9.75p on a share price of about 144.75p and a spread of 3.52%, which means the yield is only 6.74% shown on dividend investor.

For the sake of comparing borrowing for 5 years £10,000 from Sainsburys Bank leaflet shows 3.5% APR with a total repayment of £10,900.20.

Purchasing shares in GOOD Gladstone Commershal has a spread of only 0.6% , finishing today @ $16.35 Sell & $16.35 BUY which gives a yield of about 9% (at $16 it is 9.375%) Lets say after setting it up with commissions $/£ etc you get only 9%, which the dividends can be re invested each month if you want as a big plus with compound interest taking place!

Dividend payments @ 9% on £10,000 = $900 PA x 5 years = £4,500.

Doing the sums £4,500 - £:900.20 = £3,599.20 profit

With dividends re invested at the end of year 1 means compounding £900 over 4 years @ 9% = £81 extra for 4 years = £324. Second year £81 x 3 years = £243 Third year £81 x 2 years = £162 and the 4th year £81 x 1 = £81 which totals an extra £:810 making the total profit of £4.409.20.

With OUT borrowing you would have received about £900 more.. What the share price will be in 5 years time I have no idea.

What I like about this share is you can top slice if the share price goes dramatically up or if it drops to say $12 you can either exit your position before that & buy a few more to get a better dividend rate.

You may be correct about Lloyds, it does say 9.75% though? The spread is usually less than that and will only be that high if you buy and sell each year.

As for USA companies you have to pay tax even if you fill out a tax form?

As for borrowing it was you who said "For anybody that is thinking about re mortgaging with a rate around 3% or so, it may be worth raising some extra capital to invest in this one after doing your own research." As I said not a bad idea. I would never remortgage my house to buy shares.

I can only remember LLPD for LLoyds but there was a lot of others from Lloyds when I was looking before about 2 years ago.and would be interested if any bank preference shares pay a rate as high as 9.25%.
The GOOD dividend has been paying each month $1.5 a share from Jan 2011. The share price has hit a high of$20.86 and a low of $7.03 over that period. The average share price over that period is about $15.

THIS IS A USA STOCK STOCKOPEDIA PLEASE RECTIFY THE GRAPH THANKS.

The other main positive point is it pays monthly as against 2 x a year which makes a huge difference when you re invest dividends back in.each month with the compound interest having it's effect.
II should get my first dividend payment at the end of the month.
It is certainly a good way of increasing pension income as against buying an annuity.and saying cheerio to your capital.

Also there must be millions of people with money in bank accounts getting virtually nothing for it sitting there.

21st Mar '16

Thanks Stockopedia for rectifying the correct graph.
Now if you look at the chart's graph over 1 month on a candle pattern you will notice a doji candle on 12th of Feb denoting an imminent reversal to a significant up trend of around 20% passing the $15 mark on the way up.
Remember buying @ $15 would give you a 10% dividend less costs etc.
Personally I managed to pick up some shares @ $15.45 which gives a dividend of 9.708% fixed each month. there will be slight fluctuations on that because of £/$ rates etc but certainly if you think a 5,6 or 7% dividend is good, then this has to be Excellent..
Anybody on a pension may be fortunate to get a 3% PA rise, so by using some shares in GOOD Gladstone Commercial can easily give themselves an extra 7,8 or 9% more income especially if it is in an ISA.
Even if the share price goes to $18 it would still give a healthy 8.33% less costs etc. Still worth doing in my book!

22nd Mar '16

How does the tax work on USA shares in an ISA, my experience with USA shares is they deduct 30% tax unless to complete a tax form then they deduct 15%?

I have completed a form, WBen18, I think over a year ago and have had no problems with deducting even 15%.and there is no problem holding it in an ISA. If this was the case it certainly would not be worth it. There is only the green back $ to watch against the £.
I should know by the end of this month when the first dividend is paid. Meanwhile I am in profit.
Can't see why so many people do not like this share.

W-8 Ben is the correct form, and I was told by Hargreaves the costs involved in trading this share would be only about 1.5% which they make on £/$ transactions. This was before I entered the deal to buy some.

6th Apr '16

The first dividend has now been paid.The US withhold 15% tax on the dividend payment and Hargreaves takes a 1.5% cut for currency conversion. The net result is 8% dividend payment.
Short of the 10% you say reminds me of the quote from Charles Darwin , "It is not the strangest of the species that survive, nor the most intelligent, but the one most responsive to change".

To rectify this small hiccup I thought about the Stockopedia tips and tricks. Then it came to me., A small top slice of the profits was made, which was equal to more than 6 months dividend payments, and still leaving the shares still in profit.
So doing the maths, that's another 4% (half a years worth of dividend payments) which brings the DIY dividend to 12%. The small number of shares sold to top slice will have negligible effect on the future dividend payments.
If there is a will there is always a way! Simply keep calm and carry on.

29th Sep '16

An update on the progress of this company still paying out their constant dividends each month. The capital from first purchasing is now up about 30% and the dividends are still coming in each month.producing a significant addition to the profit so far..
With the share price rising some 30%,the dividend payment if you purchase now will be lower than in March this year. As Good pays out a constant dividend each month it means when you purchase shares in the company you "lock in" to that constant payment rate.
If the share price was @ $12 then the dividend yield would be paying a higher dividend.
So far so GOOD. The compound interest is having it's effect.

Boost your income with GOOD Gladstone Commertial almost 10% yield!

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Lightningtiger

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