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Tweaking My REIT Yield-Hog Screen For Better 'Distribution Quality'

Published Sat, 21 Jul 2018 07:03:54 -0400 on Seeking Alpha

In a 7/5/18 blog post, I introduced a Real Estate Investment Trust (REIT) yield-hog screen. Obviously, it seeks high yields. Less obviously but more important, it first carefully prequalifies the candidates by eliminating REITs I deem most vulnerable to outsized distribution cuts by considering REIT cash on cash return and leverage. But upon using the screen in practice, I discovered a hitch which I address here through a revision.
The Recipe Most of the model is exactly as it originally stood. Hence, most of the details presented here are reproduced verbatim from my 7/5/18 post. To spare you the burden of re-reading everything, I conspicuously identify which items are new.
I start by eliminating a sub-group known as mortgage REITs. I want genuine real estate operations, not wannabe-but-less-regulated banks. The data I use doesn’t work for them and I’m not confident in my ability to evaluate the kinds of risks they present. Next, I try to weed out dividend problems that have already surfaced. I ban REITs that have eliminated the dividend in any of the last four quarters. In a perfect world where we could always count on dividend achievers, Dividend Aristocrats, etc., I’d also expel REITs that have reduced, but not completely eliminated, the dividend in any of the past four quarters. But if I’m going to focus on business factors, I have to cope with the reality that sometimes, things get choppy. As pass-through entities, REITs don’t have as much... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CORECIVIC 23.80   16.6 1.43 1.76 7.42
BRIXMOR PROPERTY GROUP 18.20   14.9 1.22 1.12 6.25
EPR PROPERTIES 78.00   20.9 3.74 4.50 5.78
OUTFRONT MEDIA 25.15   34.4 0.73 1.44 5.64
WP CAREY & CO 85.28   27.1 3.15 4.13 4.86


Older articles featuring Corecivic (CXW):
2 High-Dividend REITs Yielding Over 8%, With Higher Guidance, No K-1s
Our High Yield REIT Portfolio Heading Into The 2nd Quarter
Your 50 Real Estate WallStars By Yield And Target Gains For February 2020
Our 10% Yielding REIT Portfolio Heading Into 2019
Our Intelligently Diversified High Yield REIT Portfolio Designed For Outperformance
Our High Yield REIT Portfolio Designed For Outperformance
Screening To Shield REIT Yield Hogs From The Butcher's Knife
Our High Yield, Value REIT Portfolio Designed For Outperformance
'Safer' Dividend Real Estate Stocks Led By CoreCivic, Ellington, EPR, & Cherry Hill, By Broker December Targets
Niche Industry REIT Yields 7.5%, Strong Balance Sheet, Near 52-Week Lows, 11% Below Lowest Price Target