BNL

REITs Will Likely Continue To Underperform

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By Brian Nelson, CFA Stock prices and returns are in part a function of the cash-based sources of intrinsic value: net cash on the balance sheet and future expectations of free cash flow. Though there are many ways to slice and dice a company with respect to equity analysis, to arrive at an intrinsic value estimate of a firm, it generally comes down to these two important cash-based dynamics. Due to the nature of their business models, most REITs have lofty net debt positions, and many are investing in real estate at a pace that is faster than that which they are generating operating cash flow. One good example of the trouble brewing on many a REIT’s cash flow statement … Read more

ICYMI: Let’s Play Devil’s Advocate: What’s the Bear Case for Realty Income?

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By Brian Nelson, CFA We like Realty Income Corp. (O) a lot, but it’s not hard to see that the REIT could potentially have all the makings of a black swan. For one, the stock is loved by almost everyone–REIT investors, income investors, and dividend growth investors alike. Many are simply enamored by its monthly dividend, which it has raised nearly 120 times since it was listed on the NYSE in 1994. Over its 54-year history, the REIT has paid 632 consecutive monthly dividends, too. There’s a ton of things to like about Realty Income, but for this note, let’s build and examine the bear case, one that can be broken into three pillars: 1) its retail exposure, 2) its … Read more

Why Are the Dividends of REITs So Risky?

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By Brian Nelson, CFA Not all REIT dividends are safe. Many REITs remain capital-market dependent, and some office REITs, retail REITs, and healthcare REITs may be difficult places to generate dependable long-term income in the coming decades, in our view. Office REIT SL Green (SLG) recently cut its payout 13% on December 5, 2022, while another office REIT Vornado Realty Trust (VNO) cut its dividend 29% on January 18, 2023. These are just two of the latest high-profile REIT dividend cuts, and there may be more to come. Contrary to popular opinion, the REIT sector has not been a great source of dependable, reliable income, particularly during the COVID-19 crisis. Five REITs cut their dividends in 2019: Medalist Diversified REIT … Read more

REITs May Continue to Face Pressure

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Image: The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%. By Brian Nelson, CFA Times are tough for equity REITs (VNQ) and mortgage REITs (REM), with the VNQ and REM down 25% and 30%, respectively, so far in 2022. This is against a backdrop of Valuentum’s simulated Dividend Growth Newsletter portfolio and High Yield Dividend Newsletter portfolio that are doing far better. The lesson in 2022, … Read more

High-Yielding Digital Realty Is Committed to Rewarding Income Seeking Investors

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Image Shown: Digital Realty Trust Inc continues to secure new leases which supports its growth outlook. Image Source: Digital Realty Trust Inc – Second Quarter of 2022 Earnings Press Release By Callum Turcan Data center real estate investment trusts (‘REITs’) are a great source of income with ample growth opportunities given the secular tailwinds underpinning data demand growth. The proliferation of cloud computing, the Internet of Things (‘IoT’) trend, the rise of autonomous automobiles, households that previously did not have access to the Internet gaining access (particularly in sub-Saharan Africa and South Asian), the rollout of 5G wireless services, and other factors are all driving up data demand around the world. In turn, that makes it easier for data center … Read more

Dividend Increases/Decreases for the Week of July 1

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Below we provide a list of firms that raised their dividends during the week ending July 1. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week      ASE Technology (ASX): now $0.359 per share dividend, was $0.218. Bank OZK (OZK): now $0.32 per share quarterly dividend, was $0.31. Broadstone Net Lease (BNL): now $0.27 per share quarterly dividend, was $0.27. Ermenegildo Zegna (ZGN): now $0.09 per share dividend. Farmland Partners (FPI): now $0.06 per share quarterly dividend, was $0.05. First Bancorp (FNLC): now $0.34 per share quarterly dividend, was $0.32. General Mills (GIS): … Read more

Dividend Increases/Decreases for the Week December 31

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Below we provide a list of firms that raised their dividends during the week ending December 31. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Bancolombia S.A. (CIB): now $0.0661 per share quarterly dividend, was $0.0612. BrightSpire Capital (BRSP): now $0.18 per share quarterly dividend, was $0.16. Broadstone Net Lease (BNL): now $0.265 per share quarterly dividend, was $0.255. Cadiz Inc. 8.875% DEP PFD A (CDZAP): now $0.56 per share quarterly dividend. Green Stream Holdings (GSFI): now $0.001 per share special dividend. Grupo Aval Acciones y Valores S.A. (AVAL): now $0.022 … Read more

Dividend Increases/Decreases for the Week October 1

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Below we provide a list of firms that raised their dividends during the week ending October 1. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week American Financial (AFG): now $0.56 per share quarterly dividend, was $0.50. BancFirst (BANF): now $0.36 per share quarterly dividend, was $0.34. Bancolombia S.A. (CIB): now $0.067 per share quarterly dividend, was $0.061. Bank OZK (OZK): now $0.29 per share quarterly dividend, was $0.285. Benefit Street Partners Realty Trust (BESP): now $0.355 per share quarterly dividend. Broadstone Net Lease (BNL): now $0.255 per share quarterly dividend, … Read more

ICYMI: Valuentum’s Brian Nelson on the Latest Howard Marks’ Memo: “Something of Value”

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Valuentum’s President of Investment Research Brian Michael Nelson, CFA, explains why there are not really value and growth stocks, why most of the research in quantitative finance is spurious and needs to be redefined on a forward-looking basis, and why enterprise valuation (not the efficient markets hypothesis) should be the organizing principle of finance. Nelson explains his views about valuation, what it means to be a value investor, and investing in the context of Oaktree Capital Howard Marks’ latest memo, “Something of Value,” January 11, 2021. Please don’t forget to give the second edition of the book “Value Trap” a 5-star rating on Amazon here. Thank you for your membership! —– Tickerized for holdings in the IWM. Valuentum members have … Read more

Dividend Increases/Decreases for the Week January 1

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Below we provide a list of firms that raised their dividends during the week ending January 1. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Banco Bradesco (BBD): now $0.061 per share monthly dividend, was BRL 0.0172. Bancolombia S.A. (CIB): now $0.32 per share quarterly dividend, was $0.27. Broadstone Net Lease (BNL): now $0.25 per share dividend. BRP (DOOO): now $0.11 per share dividend, was CAD 0.10. Gilat Satellite (GILT): now $0.63 per share special dividend, was $0.36. HCA Healthcare (HCA): now $0.268 per share dividend, was $0.072. Invesco Mortgage Capital … Read more