VNQ

Don’t Let “Them” Spin the Narrative

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By Brian Nelson, CFA Let’s call it how it is: 2022 was an absolute nightmare for the 60/40 stock/bond portfolio. During the year, the 60/40 stock/bond portfolio was down 16.9%, according to data from the Vanguard Balanced Index Fund Shares (VBIAX). During 2022, the S&P 500 (SPY) index was down 18.2%, meaning that the 60/40 stock/bond portfolio, despite allocating to 40% bonds, captured over 90% of the downside risk. Modern portfolio theory is dead: Stocks have done far better than bonds during upswings, and only slightly worse during downturns. The risk/reward for the 60/40 stock/bond portfolio just doesn’t add up anymore. Bond prices did not move inversely to stock prices during the COVID-19 meltdown, and they did not move inversely … Read more

Our Reports on the Real Estate Investment Trusts (REITs)

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Dividend Yield: Estimated on a forward-looking annualized basis. VBI: The Valuentum Buying Index, a timeliness indicator that overlays a price-to-fair-value estimate consideration. Fair Value Estimate: Derived by Valuentum’s enterprise valuation process. Dividend Cushion ratio: A ratio assessing the health of the dividend (the higher, the better). Data as of the date of this article. Individual company reports may have been updated subsequent to the publishing of this article, so please download a company’s stock and dividend report for its latest information and data. Note: The data in the tables of each of the below companies’ respective stock pages is updated the weekend after the publishing of this update. Please click on a company name below to view the corresponding equity … Read more

CubeSmart Raises Dividend 14% But We’re Monitoring High Net Debt Load and Deteriorating Occupancy Rates

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Image Source: CubeSmart By Brian Nelson, CFA On December 7, CubeSmart (CUBE) raised its quarterly dividend 14%, to $0.49 per share, which implies a forward estimated dividend yield of ~4.5% at the time of this writing. Though we’ve grown more cautious on REITs the past many months in light of rising interest rates, we include a number of REITs across our newsletter portfolios, and CubeSmart is included in the High Yield Dividend Newsletter portfolio. Image Source: CubeSmart The REIT has economic interests in self-storage properties across roughly two dozen US states and also operates a sizable management platform for self-storage properties owned by third parties. CubeSmart’s owned portfolio (properties it has a direct economic interest in) was comprised of ~610 … 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

Life Storage Operates Within An Attractive Slice of the REIT Sector

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Image Source: Life Storage By Brian Nelson, CFA On November 2, Life Storage (LSI) reported solid third quarter results with its top line and adjusted funds from operations (“FFO”) exceeding the consensus estimates. Equity REITs have faced considerable weakness during 2022, and Life Storage has not been immune to the selling pressure. When it comes to REITs, however, we still like shares of this well-positioned self-storage operator, and investors are getting a rather nice dividend check to boot. Since 2010, Life Storage has generated a ~10% compound annual growth rate in adjusted FFO per share, an impressive feat. Life Storage buys, owns and manages self-storage properties that offer space for consumers and commercial users to store items from automobiles to … Read more

ALERT: Replacing DLR with XLE in DGN and HYDN Portfolios; Public Storage Remains One of Our Favorite REITs

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“The REIT space has had a difficult time this year. Public Storage, which reported results November 1, remains one of our favorite REITs, but we are making a change to remove DLR in the simulated Dividend Growth Newsletter portfolio and High Yield Dividend Newsletter portfolio and replace its “weighting” with the Energy Select Sector SPDR (XLE). The changes will be reflected upon the release of each newsletter’s next edition. We continue to monitor the REIT space cautiously as interest rates rise, and as investors seek out alternatives for income, including I-Bonds yielding 6.89% and certificates of deposit approaching 4% yields.” — Brian Nelson, CFA By Brian Nelson, CFA This year has not been kind to real estate investment trusts (REITs), … Read more

Get Excited: Dividend Growth Investors Rejoice! – More “Outperformance”

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Image: Valuentum’s simulated Dividend Growth Newsletter portfolio continues to “outperform” relative to almost any dividend-paying benchmark this year! Past performance is not a guarantee of future results. This is not a real money portfolio. By Brian Nelson, CFA We just talked about the awesome success rates of the Exclusive publication, the fantastic performance of the simulated High Yield Dividend Newsletter portfolio, and now my friends, let’s put our hands together for Valuentum dividend growth investors! As of the last tally through October 19, the simulated Dividend Growth Newsletter portfolio is beating the S&P 500 Dividend ETF SPDR (SDY) by roughly ~3.2 percentage points so far in 2022 (-8.4% versus -11.6%), all the while we’ve seen some awesome dividend growth by … Read more

High Yield Dividend Newsletter Portfolio Continues to Deliver!

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Image: The year-to-date simulated performance of the High Yield Dividend Newsletter portfolio, which continues to hold up well during 2022, while offering an attractive forward estimated dividend yield. Data retrieved interim session October 19.   By Brian Nelson, CFA  Valuentum’s newsletter product suite continues to deliver in good times and bad. For those of you interested in high dividend paying stocks, we offer a High Yield Dividend Newsletter and a simulated High Yield Dividend Newsletter portfolio, which has been holding up well amid the weakness across both the stock and bond markets this year.   Based on our calculations, the simulated High Yield Dividend Newsletter portfolio now boasts an estimated forward dividend yield of ~5.44% and is down only approximately 10% on … Read more

Serious Question: What Are You Looking At?

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Image: Stocks with the largest 52-week losses, according to YahooFinance. By Brian Nelson, CFA Thank goodness that you’re subscribed to a service that didn’t include any of the above as top ideas in their simulated newsletter portfolios. Many were chasing returns in 2021 and are now left holding the bag this year, but we stuck to our methodology and processes, and we didn’t expose members to tremendous risks. That’s what it’s all about.  With that said, let’s talk about how we successfully navigated a number of these terrible ideas in the Exclusive publication, a monthly resource that includes an income idea, a capital appreciation idea, and a short idea consideration, released to members each month on the 8th. Exclusive Long Ideas … Read more

CubeSmart Is a Tremendous High Yielding Idea

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Image Shown: CubeSmart is one of our favorite high yielding ideas. Image Source: CubeSmart – June 2022 IR Presentation By Callum Turcan CubeSmart (CUBE) reported second quarter 2022 earnings that missed consensus top-line estimates but beat consensus bottom-line estimates. Last quarter, the self-storage real estate investment trust (‘REIT’) posted strong same-store net operating income (‘NOI’) growth due to its high occupancy rates and substantial pricing increases seen of late. CubeSmart also raised its full-year guidance for 2022 in conjunction with its latest earnings report, and that comes on the heels of the firm previously raising its full-year guidance during its first quarter of 2022 earnings update in April 2022. We continue to be huge fans of CubeSmart and include shares … Read more