The primary investment objective of Three Point Capital Corp. is to provide its shareholders with a stable monthly dividend secured by careful investment in mortgage loans that adhere to the company’s disciplined underwriting policy.
We aim to achieve our investment objectives by demonstrating discipline in the details. We strive to ensure our mortgage loans are made within communities where the stability and liquidity of real estate is high and to borrowers that represent an acceptable level of risk with a significant amount of equity to contribute; and we aggressively manage our portfolio. Stability and consistency to shareholders is prioritized ahead of growing the size of the company.
As a Mortgage Investment Corporation, the company focuses primarily on residential mortgages under $500,000 secured in the first position and distributes all earnings every year by way of a monthly dividend to shareholders.
Dividends are declared and paid monthly. ThreePoint Capital delivered a return of 7.08% to shareholders in 2017 and 7.17% in 2018 and 7.03% in 2019 net of fees. The company offers the choice of monthly cash dividend payments or dividend reinvestment program (DRIP) that allows shareholders to automatically reinvest their dividends in new shares of ThreePoint and enjoy the benefit of compounding interest.
The monthly dividend is currently between 4% – 6% p.a., paid monthly, with a top-up dividend paid to each shareholder of record as at the last day of the fiscal year (December 31st) to match the actual yield earned by the company as determined by our Auditors (Grant Thornton).
Under Section 130.1 of the Income Tax Act, taxable dividends paid to shareholders are taxed as interest income. As a Mortgage Investment Corporation, we do not pay any income taxes, provided that we distribute all of our taxable income each year. In effect, we flow interest income that we earn on our investments in mortgages through to our shareholders.
REGISTERED PLAN ELIGIBILITY
The shares of Three Point Capital Corp., a mortgage investment corporation (MIC), are qualified investments for deferred income plans including registered retirement savings plans (“RRSPs”), registered retirement income funds (“RRIFs”), tax-free savings accounts (“TFSAs”) and registered education savings plans (“RESPs”).
The company qualifies as a MIC and is restricted from any activity that would result in it failing to qualify as a MIC. To qualify as a MIC, the company must satisfy the requirements in subsection 130.1(6) of the Income Tax Act throughout the taxation year. The company’s only undertaking can be the investing of funds; it is not permitted to manage or develop real property.
Three Point Capital Corp. has engaged Fundamental Research Corporation to provide continuous analyst coverage on the company. This report is paid for by Three Point Capital and is available for download here.View Report >