Steel week continues today with Great Northern Iron Ore Properties (GNI).  GNI is a steel trust and has all the classic properties of one.  They provide a higher dividend than most ordinary businesses, at 8.8% annually. Their per-share price range has been fairly small over the last 52 weeks.  Their profitability and return on investments have been excellent, far outstripping the average 10-20%.

Normally, when I see an annual dividend that's close to the cash flow (after proper time scale factors are applied), it makes me queasy.  Dividend cuts are one of the biggest reasons for sudden price nosedives.  In this case, however, I don't think the dividend will be cut.  It's larger than the TTM cash flow, but only by a fraction of a percent, and the year isn't completely over yet.  With scale factors applied, the dividend falls just under the annual cash flow.  By itself, that wouldn't be enough; even if it's technically payable, it's still nearly the entire company's cash flow.  This company being a small cap also causes some worry, since they're not growing a lot and they have less capital to work with if something goes wrong.  However, the management effectiveness and profitability show a positive trend, and steel is a good sector in which to have a trust.

I'm going out on a limb by saying this dividend is sustainable and this trust is strong, but I feel confident in this hypothesis.  GNI should provide growth for the investor in the long term, and it should survive the uncertain market over the next year.