STRC preferred shares are paying a 12% dividend rate, a payout that stays in place as long as the shares trade below their $100 par value. The condition has already delivered a payout boost once before, when the stock remained well under par for a month.
How the dividend rate works
Preferred shares typically carry a fixed dividend, but STRC’s structure ties the rate to the share price. The 12% dividend is maintained only while the shares trade below the $100 par value. Par value is the face value of the share, often used to calculate dividend payments. If the share price rises above that level, the dividend rate could change — though the terms of the security don’t specify what happens above par. For now, investors collecting the 12% yield are watching the share price closely.
Previous payout boost
Investors have already seen a payout boost from this mechanism. When STRC preferred shares traded well below par for a full month, the dividend was increased. The exact size of that boost wasn’t disclosed, but it shows the potential for additional income when the stock stays depressed. The condition appears to be tied to a sustained period below par, not just a single day’s close.
The next trigger for a payout boost would be another month-long stretch where the shares trade significantly below $100. Whether that happens depends on market conditions and investor sentiment toward STRC. No further details on the boost formula have been released.
