Dividend investors look at the income stream, recognizing that the NAV will bounce around, like all equity-based investments.

 

 

Year-over-year, DVY's dividend has DECREASED each of the last 2 years.   It is easy to hide this (for a while) when you cut dividend payments and/or increase the time between payments as DVY has done over the past 3 years.  But eventually the truth comes out.

 That truth is that the dividend payment in 2007 was over 30% LOWER than the payment in 2006.  And the 2006 payment was over 8% LOWER than in 2005.  Those are ugly numbers for anyone that was depending on those dividends...

You might want to check your analysis -- the stream of numbers is correct, but you might notice that there was NO dividend payment last June.   There were only 2 dividend payments in 2007 -- March and September.  If they wanted to keep things kosher (for year-to-year comparison), they would have made another March payment.  But they waited until June.

Why did they wait?  I believe it was so that they could make it look like the dividend increased.  But 63.1 cents/share over a 9-month period is well below the 59.7 cents/share over the 6 month period ending Sep-07.  And it is WAY below the 56.5 cents/share for the 3-month period ending June-06. 

This means what you referred to as a 12% increase year-over-year was really closer to a 63% DECREASE over 2 years.

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http://www.ishares.com/product_info/fund/distributions/DVY.htm

http://www.etfconnect.com/select/fundpages/etf_funds.asp?MFID=120729

 

These links may shed some light on the issue.

 

Have fun.

 

John Walter Russell

AcmeFool has some good points.

Is this only a problem with Yahoo Finance or is it something else? I would like to know.

Have fun.

John Walter Russell

 

I think that NAV and price are important to the yield oriented investor.  If the price drops a lot, the yield goes up a lot... and eventually, the entity will cut its dividend to the yield that it views as necessary to pay to attract investors and that will be less detrimental to its NAV.

I think that a security that can't maintain its NAV and price fairly steady over the long term is really giving you back part of your principal to maintain its current dividend.  You are sacrificing capability to earn future dividends to maintain present dividends.

If a yield oriented security like DVY has been losing value as the Fed drops rates, you have to wonder what will happen when rates rise.  I think that you have to throw in the risk of the market's response to the end of Bush's tax cuts, which would take out the 15% tax on equity dividends.  The odds favor that they will expire as a democratic Congress is very likely to prevent the action necessary to continue them... and maybe the market has been anticipating that.  Seems like a pretty risky way to get a 5% yield to me.  I don't think that a little over 5% is rewarding you for the risk you are taking...

jmho

erryl

 

AcmeFool:

You might want to check your analysis -- the stream of numbers is correct, but you might notice that there was NO dividend payment last June.   There were only 2 dividend payments in 2007 -- March and September.  If they wanted to keep things kosher (for year-to-year comparison), they would have made another March payment.  But they waited until June.

Why did they wait?  I believe it was so that they could make it look like the dividend increased.  But 63.1 cents/share over a 9-month period is well below the 59.7 cents/share over the 6 month period ending Sep-07.  And it is WAY below the 56.5 cents/share for the 3-month period ending June-06. 

This means what you referred to as a 12% increase year-over-year was really closer to a 63% DECREASE over 2 years.

 

Here's the payout history from the iShares web site: http://tinyurl.com/5329ja

iShares shows a July 5, 2007 payment of 0.58298/share.
I checked my brokerage account and found that I received dividend payments from DVY in  March, early July, early Oct 2007, and again on 1.3.08.

 Greg

 

Am I the only investor who has received a dividend payment from DVY each and every quarter since its inception? Mr. Fool's comments certainly do not jibe with my experience.

Bobbi 

Greg:

The problem is you left out a few quarters in you initial chart and the poster must have thought you were providing the entire history for that period.

Your no Justin :o}

For the record, DVY's NAV has lost -20.67% through July 1, according to data posted on Morningstar and Yahoo! Finance. (Compare that to the cef BGR which has gained +21.45% in the same time frame.) DVY's NAV isn't "bouncing around." Look at its chart on etfconnect.com: Since Oct. 2007 it has been heading down, losing -26.07%.

closer:

For the record, DVY's NAV has lost -20.67% through July 1, according to data posted on Morningstar and Yahoo! Finance. (Compare that to the cef BGR which has gained +21.45% in the same time frame.) DVY's NAV isn't "bouncing around." Look at its chart on ETF Connect: Since Oct. 2007 it has been on a downward trajectory, losing -26.07%.

DVY has certainly sustained an NAV loss.  I have compared it to others on this chart: http://tinyurl.com/6f4nzx

 Greg