Monday, May 23, 2022

What is the Distributable Net Income and Why is it Important?

What is the Distributable Net Income

Investors should understand that the declared distribution amount may be impacted by the eventual federal income tax consequences and tax laws of the US. US-based investors are also required to pay US taxes on distributions.

Investors should also be aware that the amount distributed by the REIT does not represent its earnings or cash flows; and that the amount distributed is not indicative of the REIT’s earnings or cash flows for other period.

Why is the distribution of Net Income Important?

The Fund’s Net Asset Value calculation takes into account many of the same factors that impact the Net Asset Value of the Fund, such as leverage. Distributions have no tax consequences as distributions are not taxable as income. Distributions may be paid in some or all of the money you contributed to the Fund and they will not be taxed as regular income. A return of capital may occur, for example, when some or all of the money you contributed to the Fund is paid back to you.

How does it affect the company’s bottom line?

In order to derive the future outlook of the company, analysts have conducted earnings revisions to calculate future dividend payments. A number of brokerages have updated their recommendations and price targets on shares of Consumer Edge in recent months. Roth Capital has an “Outperform” rating and a $36.00 price target on the stock.

Brokerages have set a twelve-month consensus target price of $34.00 for the company and are forecasting that the company will post $0.60 earnings per share for the current quarter, according to Zacks Investment Research. Three analysts have issued estimates for Consumer Edge’s earnings, with the highest EPS estimate coming in at $0.

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