How will the $0.546875 cash dividend on the Series A Preferred Stock affect OHC's overall dividend yield for investors?
The $0.5469 per‑share cash payout represents the 8.75 % coupon that OHC’s 8.75 % Series A Cumulative Redeemable Perpetual Preferred Stock was issued with. On a $6.25 par value the dividend works out to exactly an 8.75 % return; however, the market price of the preferred shares typically trades above par (e.g., $25–$30 in recent weeks). At a $27 price the $0.5469 payment translates to a yield of roughly 2.0 % (0.5469 ÷ 27 ≈ 0.020). For investors who hold both the common equity and the preferred, the preferred dividend adds a modest, fixed‑income component to the overall portfolio return, but it does not dramatically lift the combined dividend yield unless the preferred price falls sharply toward par.
From a fundamentals standpoint, the preferred dividend is “cumulative” and perpetual, meaning any missed payments will accrue and must be paid before any common shareholders can receive distributions. This structure gives the preferred series a floor of safety and can make the security attractive in a risk‑off environment, potentially supporting the price on the day of the September 15 payment. Technically, the preferred‑stock chart has been in a tight range for the past month, with the September 15 date acting as a short‑term catalyst; a modest bounce in the series is possible if the market digests the cash flow as a sign of solid cash generation from OHC’s ammunition and marketplace businesses.
Trading implication: The dividend adds a small, predictable cash return for existing holders and may prompt a modest short‑term rally in the preferred shares, but the overall dividend yield for a mixed‑holding investor remains modest (≈2 % on current preferred prices). Unless you are specifically targeting high‑yield, fixed‑income exposure, the preferred dividend is unlikely to materially change the equity‑side valuation of OHC. Most traders can treat the September 15 payout as a low‑volatility, “buy‑the‑dip” opportunity in the preferred series, while keeping the primary focus on the company’s growth narrative and common‑stock fundamentals.