Valuentum Exclusive Analysis for the Discerning Investor

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May 14, 2020

Digital Realty Trust is Holding Up Quite Well
Image Shown: Shares of Digital Realty Trust Inc, a holding in both our Dividend Growth Newsletter and High Yield Dividend Newsletter portfolios, have outperformed the S&P 500 by a wide margin over the past year and that’s before taking dividend considerations into account. On May 7, the data center real estate investment trust (‘REIT’) Digital Realty Trust reported first-quarter 2020 earnings. Though the firm’s near-term guidance disappointed investors, management communicated that the medium- and long-term trajectory of Digital Realty’s financial and operational performance remained strong. Furthermore, its liquidity position and its dividend coverage continued to be rock-solid, particularly after factoring in the data center REIT’s ongoing access to equity markets and lack of near-term debt maturities. Data centers are generally considered “essential” activities around the world given we live in the digital age and these assets have continued to operate during the pandemic. Shares of DLR yield ~3.4% on a forward-looking basis as of this writing.

May 13, 2020

Realty Income Signals Turbulence Ahead, Shores Up Liquidity Position
Image Source: Realty Income Corporation – First Quarter of 2020 Earnings IR Presentation. On May 4, the real estate investment trust (‘REIT’) Realty Income Corp posted first-quarter 2020 earnings that saw its adjusted funds from operations (‘AFFO’) per share jump by over 7% year-over-year, hitting $0.78 last quarter. Realty Income pays out a monthly dividend, and shares of O yield ~5.1% as of this writing. We like the REIT’s business model, which invests in single-tenant commercial properties, and view Realty Income as well-positioned to ride out the ongoing coronavirus (‘COVID-19’) pandemic. However, we caution that its near-term financial performance will come under fire from some of its tenants no longer being able to (or willing to) pay rent due in part to the economic downturn. As roughly half of its tenants carry investment-grade credit ratings, Realty Income is in a better position than some of its peers. Most of Realty Income’s tenants have continued to pay rent during the pandemic, at least during the early stages of the crisis, and the REIT is working with its troubled tenants to find a solution that suites the interests of both parties.

May 6, 2020

Public Storage Currently Has the Financial Strength to Support Its Payout
Image Source: Public Storage – 2019 Annual Report. High Yield Dividend Newsletter portfolio holding Public Storage reported its first quarter results for 2020 on May 1. The self-storage real estate investment trust’s (‘REIT’) core funds from operations (‘FFO’) per share grew by 2% year-over-year last quarter, hitting $2.58 per share, while its occupancy rate (as measured by its rentable square feet) grew by ~60 basis points year-over-year, reaching 93.1%. Public Storage was also able to push through marginal same-store rent increases, though rising operating costs (particularly property taxes, payroll expenses, and marketing expenses) chipped away at its margins last quarter. As of this writing, shares of PSA yield ~4.4%.

Apr 23, 2020

Jernigan Capital Fundamentally Transforms Its Business Model
Image Source: Jernigan Capital Inc – March 2020 IR Presentation. Jernigan Capital is now an internally managed real estate investment trust (‘REIT’) that invests in self-storage properties, either directly or by providing funding for developers that build such properties. Shares of JCAP currently yield ~7.8% (as of this writing) in the wake of Jernigan Capital’s stock price selling off aggressively this year, as investor concerns mounted due to the ongoing coronavirus (‘COVID-19’) pandemic. Jernigan Capital is in the midst of a major shift in its business model and overall corporate strategy, and we like the changes management is in the process of making. While these are still early days, plenty is already known about this seismic shift and more information will become available in the coming weeks.

Apr 9, 2020

Digital Realty’s Growth Outlook Improving, Shares Near All-Time Highs
Image Source: Digital Realty Trust Inc – March 2020 IR Presentation. Digital Realty Trust is a holding in both the Dividend Growth Newsletter and High Yield Dividend Growth Newsletter portfolios, and its shares have performed quite well of late with DLR trading near all-time highs as of this writing. Year-to-date, DLR is up ~26% while the S&P 500 is down ~13% as of this writing. Demand for data centers is surging as the ongoing coronavirus (‘COVID-19’) pandemic is forcing households to stay indoors, which in turn is increasing demand for video streaming services, telecommunications offerings, and other activities that are voracious consumers of data. During these harrowing times, we hope members and their loved ones are staying safe as we ride out the pandemic. Shares of DLR yield roughly 3.0% as of this writing.

Mar 21, 2020

Top Ten Dividend Growth Stocks to Consider Amid COVID-19
Image Shown: A look at some of the top dividend growth stocks to consider, companies with strong Dividend Cushion ratios and nice payout growth trajectories, in light of ongoing turbulence in equity markets. The 'Multiplier' column multiplies a company's dividend yield by its Dividend Cushion ratio. The novel coronavirus (‘COVID-19’) pandemic continues to wreak havoc on global economies, credit and equity markets, and the livelihoods of many. We sincerely hope everyone stays safe during this pandemic. US equities have sold off aggressively during the past month, with the S&P 500 down ~25% year-to-date as of this writing, punishing the names of several top quality dividend growth opportunities that we will highlight in this note today.

Mar 2, 2020

Self-Storage Industry Faces a Rocky 2020, But Long-Term Outlook Remains Bright
Image Source: CubeSmart – November 2019 IR Presentation. With housing costs rising aggressively in “Tier 1” and “Tier 2” cities across the East and West coasts in the US, that has created an immense need from households for additional storage space but at a much lower cost than simply buying a larger home, apartment, or condo. This has created a major secular growth trend that we’ve highlighted repeatedly in our High Yield Dividend Newsletter (‘HYDN’) by including shares of CubeSmart and Public Storage in our HYDN portfolio, both of which are self-storage focused real estate investment trusts (‘REITs’). Click here for more information on our HYDN. Both self-storage REITs have steadily grown their already sizable payouts over the past several years and we expect that to continue to be the case going forward, with shares of CUBE and PSA yielding ~4.2% and ~3.6%, respectively, as of this writing.

Feb 21, 2020

Realty Income Closes Out 2019 With a Solid Earnings Report and Promising Guidance
Image Shown: Shares of Realty Income Corporation, a holding in our Dividend Growth Newsletter portfolio, have taken off year-to-date. On February 19, the commercial property focused real estate investment trust (‘REIT’) Realty Income Corporation reported fourth quarter and full-year earnings for 2019. Its results beat market expectations for both its GAAP revenues and non-GAAP funds from operations (‘FFO’), which saw shares continue to march higher after performing quite well year-to-date. We include shares of O in our Dividend Growth Newsletter portfolio and continue to like the name. Please note that when we update our Retail REIT Industry models, it’s likely Realty Income will receive a nice boost to its fair value estimate and fair value estimate range. As of this writing, shares of O yield ~3.4% on a forward-looking basis and the REIT pays out a monthly dividend.

Feb 18, 2020

Digital Realty Starts 2020 Off Right
Image Source: Digital Realty Trust Inc – Fourth Quarter and Full-Year 2019 IR Earnings Presentation. On February 13, the data center real estate investment trust (‘REIT’) Digital Realty Trust reported fourth quarter and full-year earnings for 2019 after the market close. The firm’s top-line marginally missed consensus estimates as its funds from operations (‘FFO’) per share modestly beat consensus estimates. Shares of DLR marched up 4% on February 14 as investors priced in the FFO per share beat and recent events. We continue to like shares of DLR as a holding in our Dividend Growth Newsletter portfolio. As of this writing, Digital Realty yields ~3.3%.

Dec 16, 2019

ICYMI: Interview with Valuentum’s Callum Turcan
Callum Turcan helps head up Valuentum’s research product and is co-editor of the company’s newsletters. We sat down with Callum to get his thoughts on new developments in the market and economy. Let’s kick things off with his thoughts on Brexit.