DGS.PR.A : Semi-Annual Report, 2019H1

Dividend Growth Split Corp has released its Semi-Annual Report to June 30, 2019.

Figures of interest are:

MER: ” The MER excluding Preferred share distributions and issuance costs was 0.88% in the first six months of 2019, unchanged from the same period in 2018.”

Average Net Assets: We need this to calculate portfolio yield. The Total Assets of the fund at year end was $499.6-million, compared to $549.9-million on June 30, so call it an average of $524.8-million. Preferred share dividends of $9,584,220 were paid over the half year at 0.525 p.a., implying average units outstanding 36.51-million, at an average NAVPU of (14.97 + 13.60)/2 = 14.28, implies net assets of $521.4-million. Say the Average Net Assets are the average of the two estimates, $523.1-million.

Underlying Portfolio Yield: Income received of $10,898,580 divided by average net assets of $523.1-million, multiplied by two because it’s semiannual is 4.17%.

Income Coverage: Net investment income of $8,543,279 (after expenses, before capital gains) divided by preferred share dividends of $9,584,220 is 89%.

The income coverage calculated is a bit less than the DBRS calculation in September 2019:

The dividend coverage ratio is approximately 1.0 times.

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