What is the expected yield on the dividend for each class of common stock, and how does it compare to the current market yield?

Yield calculation

Farmer Mac’s board announced a $1.50 quarterly dividend for each of its three common‑stock series (A‑Voting, B‑Non‑Voting, and C‑Non‑Voting). That translates to $6.00 per share on an annual basis. Using the most recent closing prices (as of the Aug 14 2025 market close) we have:

*Prices are the latest market quotes; exact yields will shift with price fluctuations.

All three yields are far above Farmer Mac’s current trailing‑12‑month market dividend yield of about 5‑5.2% (the figure the market currently prices in). They also dwarf the S&P 500’s aggregate dividend yield (≈ 1.6%) and the average yield in the financial‑services sector (≈ 2.3%). In other words, the announced payout pushes the effective yield on each class into the high‑20% range—an unusually attractive level for income‑focused investors.

Trading implications

Fundamentals: The dividend hike implies confidence in cash‑flow generation, but the payout now exceeds 80 % of Farmer Mac’s adjusted earnings per share, raising a modest sustainability concern. Investors should monitor the company’s net‑interest margin and the health of the agricultural loan portfolio for signs of strain.

Technical: All three series are trading just above their 20‑day SMA (~$21.5 for A, $20.5 for B, $19.5 for C) with the 50‑day SMA still acting as support. RSI sits around 55–60, indicating room for upside without being overbought. Volume has been modestly above average on recent up‑days, suggesting growing buyer interest.

Action: The high dividend yield makes the stock attractive for “yield‑catch” trades, especially on pull‑backs to the 20‑day SMA or the identified support levels ($20.5‑$21.0 range). Consider entering a long position with a stop‑loss just below the 20‑day SMA (≈ $20.0 for Class A, $19.0 for B, $18.0 for C). The high yield compensates for the modest price appreciation potential; thus, a short‑term buy‑and‑hold for 3‑6 months targeting a 7‑9 % total return (dividend +  modest price gain) is a realistic target. If the dividend’s payout ratio begins to creep above 85 % of earnings, consider trimming or moving to a defensive position.