HCP

Dividend Aristocrat No More: HCP Cuts Its Payout

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Image Source: HCP Former Dividend Growth Newsletter portfolio holding HCP recently was forced to cut its dividend as a result of the spin-off of its beleaguered HCR ManorCare portfolio. We told you it would. That’s exactly why we removed it from the Dividend Growth Newsletter portfolio in February 2016. By Kris Rosemann As the only REIT in the S&P 500 Dividend Aristocrat Index and a former Dividend Growth Newsletter portfolio holding, healthcare REIT HCP (HCP) once boasted one of the most impressive dividend track records available on the market, where 2016 had marked its 31st consecutive year of dividend increases. We’ve worked tirelessly to explain to members that it is only the future that matters when it comes to investing, … Read more

EVERYTHING DIVIDENDS + 3 TOP IDEAS

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The Valuentum analyst team explains the difference between the adjusted Dividend Cushion ratio and its unadjusted counterpart. The success of the Dividend Growth Newsletter portfolio is covered, and Valuentum’s top 3 dividend growth ideas are unveiled. ~13 minutes. If you are unable to view the video below, please select the link here or view the transcript below. Kris Rosemann: Hello and welcome to the Valuentum Securities podcast. My name is Kris Rosemann and with me today is Chris Araos and Brian Nelson, the president of equity research and ETF analysis here at Valuentum, and today we’re going to be discussing the Dividend Cushion ratio, the Dividend Growth Newsletter portfolio, and some of our favorite dividend ideas on the market today. So … Read more

You Can Change Your Mind!

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By Brian Nelson, CFA It looks like the energy master limited partnership (AMLP, AMZ) space has been catching a bid the past few days. It’s so important, however, to keep things in perspective, and the best way to do so is to look at an intermediate-term chart of the group, which remains under considerable stress, “Bye Bye Energy MLPs, Part II (Jan 2016)” The market wants some of the most beaten down equities to rally, including Energy Transfer Equity (ETE) and Energy Transfer Partners (ETP), which have fallen devastatingly from their respective peaks of $35 and near-$70 per share, respectively. If you’re not looking at charts, you’re leaving a lot of free information on the table. Energy master limited partnerships, … Read more

More Market Weakness: We Haven’t Hit Bottom Yet

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Global equity markets are falling yet again February 11, in part due to cautious comments from US Federal Reserve chair Janet Yellen about the health of the global economy and the legality/efficaciousness of negative interest rates, “Dividend Growth ‘Bubble’ To Continue But For How Long? (Feb 2016).” Market onlookers continue to fear that the Fed has nothing left to give, “out of ammunition,” with the tank of accommodative policy empty, and it might just be. To us, however, the news flow is more of the same. The world continues to be awash in crude oil (USO), and many are now starting to think that what was once mostly an oversupply problem is now being compounded by a demand problem as … Read more

Alert: Health Care REITs Whacked

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We know better than to make mistakes such as HCP (HCP), but we can’t go back now. We’ve been holding onto the company because it was just a sliver of a position in the Dividend Growth Newsletter portfolio, but today we’re saying good-bye. Here’s what we wrote as recently as November 9, “Dividend Growth Newsletter REITs:” HCP continues to be a lesson learned to us here at Valuentum. The firm’s dividend track record had far too high of an influence on our decision making in establishing a position in the REIT in the Dividend Growth Newsletter portfolio. The fact that the company is the only REIT included on the list of Dividend Aristocrats was too attractive for us to deny, … Read more

Alerts: A Long-Time Favorite from the Bullpen and An Interest Rate Risk Hedge

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We’ve long appreciated the stand-out dividend strength characteristics of Cracker Barrel (CBRL) among the full-service restaurant space, and we see an opportunity to add the company to the Dividend Growth Newsletter portfolio today (see page 5). We’ve outlined our case for Cracker Barrel in the past, “Free Cash Flow Feeds Cracker Barrel’s Dividend Growth,” and while we haven’t quite gotten our price just yet, we’re going to inch forward a bit with a small 1.5% position in the Dividend Growth Newsletter portfolio at this time. The company yields a very nice ~3.4%, and its Dividend Cushion is solid for that high of a payout. One of the areas we’re expecting Cracker Barrel to surprise to the upside is the positive … Read more

Excited About Putting Cash to Work…Eventually

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Investors are fretting over a lot of things as of late. China (FXI) announced January 19 that fourth-quarter GDP fell to 6.8%, with many noting that the measure was a 25-year low. Even if you believe that number, which may be a stretch in light of collapsing local stock markets in Shanghai and Shenzhen, the outlook can’t be much better. Steel mills across the country are reeling, and while published housing numbers don’t look that bad, we have a difficult time believing the Chinese banks are in good shape. HSBC (HSBC), Standard Chartered, and Citigroup (C) remain most exposed to what we would describe to be the growing likelihood of a contagion from weakening commodity-dependent sectors in the country. Intel … Read more

Dividend Growth Newsletter REITs

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Realty Income’s (O) Dividend Track Record Pictured: Income investors in Realty Income have been handsomely rewarded through the years. Source: Realty Income HCP’s (HCP) Dividend Track Record Pictured: HCP has rewarded income investors in each of the past 30 years with consecutive annual dividend increases. Source: HCP Let’s Talk Interest Rates There’s a lot to think about these days with respect to REITs and rising interest rates. In the equity valuation context, for one, a rising nominal interest rate, by itself, is negative. Increased borrowing costs translate into a higher discount rate applied to a REIT’s future  projected net operating income (or a higher cap rate used in the valuation process), and by extension, results in a lower intrinsic value … Read more

Analyzing Healthcare REITs

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The market seems to be unforgiving these days. The threat of rising interest rates continues to weigh on everything REIT-related. The healthcare REITs are tied to the most favorable long-term trend within our coverage universe (the aging population), but that may not be enough to completely offset worries. With many REITs priced on “cap” rates, or the discounting mechanism for future adjusted funds from operations, a looming increase in this measure means that REITs are worth less, all else equal. For some, higher net operating income and funds from operations will help mitigate inevitably higher cap rates, while others may feel ongoing pressure. Let’s walk through the second-quarter performance of three of the best healthcare REITs on the market today.  … Read more

Maintaining Our Small Position in HCP

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Dividend Growth Newsletter portfolio holding HCP’s (HCP) shares have been under pressure as of late, and we’re not happy about it. Part of the reason we were drawn to HCP, and we posit that many others were lured by the same attribute, was that it is the only REIT that is included in the coveted S&P 500 Dividend Aristocrats index. At the time it was added in 2012, there were only 50 companies in all that fit the bill of 1) a market capitalization in excess of $3 billion and 2) a track record of raising their dividends in each of the past 25 years. Though HCP’s fundamental quality has deteriorated since we added it, some of the share price … Read more