Should Strategy’s STRC Switch to Daily Dividends Like SATA?
Strategy’s STRC is currently paying a single monthly dividend at the end of the month but that could change if Stretch adopts a daily dividend payout like Strive’s SATA.
SATA will become the first United States listed security to pay daily dividends every business day starting June 16th.
On the other hand, Strategy is planning to pay semi-monthly or bi-weekly dividends instead of its current one time monthly dividend structure.
Pros of Daily STRC Dividend Payouts
- Daily Cashflow: Get paid every business day instead of 1 time per month
- Enhanced Liquidity: Higher trading volume improve liquidity
- Increased Price Stability: Fewer Post Ex-Dividend Date Selloffs
Cons of STRC Daily Dividend Payouts
- Smaller Dividend: Average STRC Dividend Shrinks from $0.96 to ~$0.03
- Complex Tax Setup (for non-tax friendly brokerage accounts): More dividends means more taxable dividend income.
- Inability to Switch Out of STRC After Ex-Dividend Date: You cannot simply buy STRC before the ex-dividend then sell immediately after. You need to HODL the entire month to pocket the whole 11.5% dividend
STRC Bi-Weekly Dividend Payments Is Good Enough For Now
We’ll see how much volume SATA attracts with its new daily dividend strategy after June 16th. For now, I’m happy with the switch to bi-weekly dividends because it acts like a 2nd paycheck for retail investors.
SATA pays a higher monthly dividend rate than STRC (13% vs 11.5%) but STRC is more than 20x larger in terms of market cap.
A lot of retail and institutional investors put more trust into Michael Saylor and Strategy to make the dividend payments than Strive CEO Matthew Cole and his SATA product.
I’ve held MSTR stock for more than 5 years and believe in STRC because Strategy holds plenty of Bitcoin to cover those dividend payments in case something breaks.
