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Our 10% Yielding REIT Portfolio Heading Into 2019

Published Fri, 11 Jan 2019 07:40:43 -0500 on Seeking Alpha

Our 2CHYP portfolio has always had an above market dividend yield, but recent market events have provided an opportunity to reposition and kick the dividends into high gear. The high yield space is a tricky place in which to invest as it often comes as compensation for high risk, but there is a better source of high yield in the form of mispricing. High quality companies that would normally have only a moderate yield can temporarily become high yield stocks when the market price falls enough. That is how I would characterize a majority of the holdings in the 2CHYP portfolio. Stocks of this nature have 2 potential sources of return:
High carrying income Capital gains as the market prices return to normal trading ranges Since mispricing has transcended most of the REIT subsectors, there is opportunity to assemble a well diversified portfolio of mispriced REITs.
Cornucopia of inefficiency
Mispricing is always present. There has never been a market environment in which all individual securities were perfectly priced, but the mispricing that exists today is on a whole other level. It is rampant; wide in scope and deep in magnitude. Mispricing of this degree has manifested from a multitude of simultaneous forces that have amplified each other.
A Perfect Storm
Remember when interest rates were rising? Before the 10 year Treasury yield dropped down to around 2.6% today it had crested above 3.2% in the second half of 2018 and REIT investors were freaking out. Below is the... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
WP GLIMCHER 5.40   13.2 0.41 1.00 19.19
CBL & ASSOCIATES PROPERTIES 1.83   0.0 -0.72 0.30 15.71
CORECIVIC 19.19   14.3 1.34 1.76 9.07
RLJ LODGING TRUST 18.19   19.4 0.94 1.32 7.31
GLADSTONE COMMERCIAL 20.48   682.7 0.03 1.50 7.20
IRON MOUNTAIN 35.23   27.7 1.27 2.44 7.08
KIMCO REALTY 18.17   17.8 1.02 1.12 6.36
MEDICAL PROPERTIES TRUST 18.84   6.8 2.76 1.00 5.49
UMH PROPERTIES 14.03   0.0 -1.54 0.72 5.24

WP GLIMCHER - WPG
WP GLIMCHER - WPG  


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