AI is sensitive to rates, housing and the economy, but has held up quite well this year (relative to others). It has been consistently profitable, and the last quarter was a record. Payout ratio is 73%. There is a cusion on the dividend, but a steep decline in earnings/cash flow could put the ratio above 100%. We would see it as a hold. MKP is quite similar, but valuation is a bit lower. Payout ratio is better at 42%. It raised its dividend in August and at 6X earnings we would see it as a buy for higher-risk income. Neither of these is risk-free, and with MKP at a 10% yield investors are worried. But we think the risks are fairly well priced in.
5i Research Answer: