Q: PRL came in with strong earnings a few days ago. Whereas GSY has been on a steady downturn lately and is down 8.5% today alone. I would have thought they would trade somewhat in sympathy with each other being in the same industry ..... I'm down about 20 % on GSY right now and considering abandoning it for greener pastures ..... If it were to at least level out I would be inclined to stay the course but it isn't ..... Need 5i advice on first what is going on ? And second why it is going on ? Thanks for your terrific service ......
5i Research Answer:
GSY has seen much slower growth of late (comments posted in Q&A). PRL meanwhile is growing much faster and is raising its dividend at a faster rate. It is possible that GSY is being more conservative. Its charge offs are very low right now, indicating good credit control. This may serve it well if we do enter a downturn. GSY's historical record is very, very solid. PRL has not been public that long but has stepped up and gotten noticed by investors. GSY is about 2 P/E points cheaper than PRL currently and the dividend is nearly 2X. GSY has been disappointing, but for now we are OK with it as a HOLD.