PHILADELPHIA REFLECTIONS
The musings of a Philadelphia Physician who has served the community for nearly six decades

Central Securities

I went to www.centralsecurities.com and got the data below

On the right, I listed the history of 1 share ... buy at $16.88, receive dividends and sell at $26.40 ... on the dates shown

The average yield was 8.98%

I assumed your tax rate was 15%  Federal and 6.37% NJ for capital gains/dividend taxes
This overstates the return because (a) these dividends contain about 15% ordinary income (per the website) and (b) prior to 2001 the tax rate for dividends was higher.

I also glossed over the reinvestment price, which complicates things a good deal but does not materially change the outcome for a security that has had a fairly stable market price.

At the bottom of the two columns I figured the Internal Rate of Return (IRR) for pre and post tax using just capital gains rates.

I then went to Morningstar and found the following information which makes me wonder what the heck I'm looking at ...

  • VTI  5-year pre-tax return of 13.06% and and after-tax return of 12.74% and a yield of  1.90%.
  • CET 5-year pre-tax return of 18.14% and and after-tax return of 16.52% and a yield of  0.54%

Far be it for me to question the all-seeing, all-knowing Morningstar, but no way did Central Securities have a yield of 0.54%.

Dividends   Share Price   Tax Rate = 15% + 6.37% = 21.37%
Payment Date Amount/Share Reinvest Price Yield   Date Market Close          
                  Pre Tax After Tax
6/28/1994 $0.15       6/30/1994 $16.88   Purchase 6/28/1994 ($16.73) ($16.76)
12/28/1994 $1.46 $15.33 10.50%   9/30/1994 $17.50     12/28/1994 $1.46 $1.15
6/28/1995 $0.15       12/31/1994 $15.75     6/28/1995 $0.15 $0.12
12/27/1995 $1.78 $19.58 9.86%   3/31/1995 $17.50     12/27/1995 $1.78 $1.40
6/28/1996 $0.20       6/30/1995 $20.50     6/28/1996 $0.20 $0.16
12/27/1996 $1.45 $23.20 7.11%   9/30/1995 $21.75     12/27/1996 $1.45 $1.14
6/27/1997 $0.20       12/31/1995 $20.88     6/27/1997 $0.20 $0.16
12/19/1997 $2.22 $28.86 8.39%   3/31/1996 $22.63     12/19/1997 $2.22 $1.75
6/26/1998 $0.20       6/30/1996 $24.00     6/26/1998 $0.20 $0.16
12/21/1998 $1.74 $21.75 8.92%   9/30/1996 $23.88     12/21/1998 $1.74 $1.37
6/15/1999 $0.20       12/31/1996 $24.13     6/15/1999 $0.20 $0.16
12/22/1999 $2.40 $24.00 10.83%   3/31/1997 $26.38     12/22/1999 $2.40 $1.89
6/23/2000 $0.50       6/30/1997 $27.38     6/23/2000 $0.50 $0.39
12/27/2000 $3.85 $30.80 14.12%   9/30/1997 $33.25     12/27/2000 $3.85 $3.03
6/22/2001 $0.35       12/31/1997 $29.69     6/22/2001 $0.35 $0.28
12/26/2001 $1.45 $21.75 8.28%   3/31/1998 $30.38     12/26/2001 $1.45 $1.14
6/21/2002 $0.10       6/30/1998 $25.88     6/21/2002 $0.10 $0.08
12/26/2002 $1.15 $16.10 7.76%   9/30/1998 $21.00     12/26/2002 $1.15 $0.90
6/20/2003 $0.12       12/31/1998 $24.38     6/20/2003 $0.12 $0.09
12/29/2003 $1.28 $19.20 7.29%   3/31/1999 $23.75     12/29/2003 $1.28 $1.01
6/25/2004 $0.15       6/30/1999 $27.38     6/25/2004 $0.15 $0.12
12/27/2004 $1.17 $21.06 6.27%   9/30/1999 $25.63     12/27/2004 $1.17 $0.92
6/24/2005 $0.20       12/31/1999 $27.25     6/24/2005 $0.20 $0.16
12/27/2005 $1.80 $22.50 8.89%   3/31/2000 $33.94     12/27/2005 $1.80 $1.42
6/23/2006 $0.20       6/30/2000 $35.50     6/23/2006 $0.20 $0.16
12/27/2006 $2.02 $24.24 9.16%   9/30/2000 $36.00     12/27/2006 $2.02 $1.59
6/22/2007 $0.20       12/31/2000 $28.25     6/22/2007 $0.20 $0.16
12/27/2007 $2.20 $26.40 8.33%   3/31/2001 $26.64   Sale 12/27/2007