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Investing.com -- Shares of Advanced Flower Capital fell as much as 12% on Monday, marking the largest intraday decline since March 13, after the company announced a dividend reduction for the second quarter.
The commercial mortgage real estate investment trust declared a dividend of 15 cents per share for the quarter ending June 30, which represents a significant decrease from the previous quarter’s payment of 23 cents per share.
According to the company, the second-quarter dividend was affected by a realized loss related to a loan made to "Public Company A." This marks the second consecutive quarterly dividend reduction for Advanced Flower Capital, as the first-quarter rate had already been cut to 23 cents from 33 cents per share.
Advanced Flower Capital specializes in providing institutional loans to state law compliant cannabis operators in the United States. The company’s board evaluates distributable earnings each quarter to determine appropriate dividend levels.
Following the dividend cut announcement, Zuanic Group downgraded Advanced Flower Capital’s stock to neutral from overweight. Analyst Pablo Zuanic commented, "We see value in AFCG and continue to believe the discount to par is overdone, but today’s news does not help that argument."
The analyst indicated he would reevaluate the rating after the company’s second-quarter commentary.
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