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Is FFN Stock a Buy?

The North American Financial 15 Split Corp (North American Financial 15 Split Corp Stock Quote, Chart, News, Analysts, Financials TSX:FFN) is a type of investment fund known as a “split share corporation” or “split share fund.” These types of funds are structured to provide both income and capital appreciation to investors through a combination of common shares and preferred shares.

The stock currently has a one year high of $6.25 and a low of $3.16.

Here’s how investment structures like FFN typically work:

Common Shares: Split share corporations issue common shares to investors. These common shares are designed to provide capital appreciation. This means that investors can benefit from any increase in the underlying assets’ value. In the case of FFN, the underlying assets are typically a portfolio of financial companies or financial services-related securities.

Preferred Shares: Split share corporations also issue preferred shares, which are designed to provide income. These shares receive a fixed dividend or distribution, which is typically higher than what common shares may receive. The income generated from the preferred shares is often used to fund the higher dividend payments to preferred shareholders.

Dividend or Distribution Payments: The income generated from the underlying assets, such as dividends or interest payments from the financial companies in the portfolio, is used to pay the preferred shareholders their fixed distributions. If there is any remaining income after paying the preferred shareholders, it may be used to pay dividends to the common shareholders.

Split share corporations are structured to cater to different types of investors. Common shareholders are seeking capital appreciation and are willing to take on more risk, while preferred shareholders are typically seeking a stable income stream and are willing to forgo some potential capital gains.

It’s important to note that investing in split share corporations can be more complex than traditional stock investments. The performance of these investments depends on various factors, including the performance of the underlying assets and the management of the split share corporation.

Before investing in FFN or any other split share corporation, it’s essential to carefully read the fund’s prospectus, understand its structure, fees, and risks, and consider whether it aligns with your investment goals and risk tolerance. Additionally, it’s advisable to consult with a financial advisor who can provide personalized guidance based on your specific financial situation and objectives.

FFN News

On August 18, North American Financial 15 Split Corp announced its dividend declaration of 6.458 cents for each preferred share, which amounts to 77.5 cents, annually.

The company noted that, since inception, Class A shareholders have received $16.04 per shares.

FFN says its mission is to invest in a “high quality portfolio” that consists of just fifteen financial services companies

FFN Holdings

These companies are: Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, The Toronto-Dominion Bank, National Bank of Canada, Manulife Financial Corp., Sun Life Financial, Great-West Lifeco, CI Financial Corp., Bank of America, Citigroup Inc., Goldman Sachs Group, JP Morgan Chase & Co., and Wells Fargo & Co.

Is FFN Stock a buy?

In December of 2022, Hap Snedddon of Castlemoore Investments appeared on BNN Bloomberg’s “Market Call and fielded a question from a viewer, who wondered whether the stock was a buy and if the company’s dividend was sustainable. At the time the company’s stock had fallen from above nine dollars to just over four dollars.

“We are little bit more indebted than we thought we were. Is that going to play into personal loans? This one is probably overreacting. We have dropped from six dollars in a short time period, that’s a big move for a financial stock, Sneddon said. “I would certainly watch this one below $4.25.”

 

 

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