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3 Yield Trap REITs To Avoid Like The Plague

Published Fri, 22 Feb 2019 07:00:00 -0500 on Seeking Alpha

This article was co-produced with Dividend Sensei.
Warren Buffett, the greatest investor in history (over 53 years of 20+% CAGR total returns) is famous for his love of contrarian value investing. What’s more some of the man’s biggest winners came in his early days when he proved adept at mastering Benjamin Graham’s (the father of value investing) “cigar butt” style of buying companies at large discounts to book value.
"...if we assume that a very considerable amount of Wall Street activity must inevitably have elements of chance in it, then the sound idea would be to measure these chances as accurately as you can, and play the game in the direction of having the odds on your side." Ben Graham
So, it’s not surprising that plenty of income investors try to “bend it like Buffett” and also try their hand at deep value investing, especially when it comes to REITs, which by law, are a high-yield sector.
But as with all things in finance, there is both art and science to deep value REIT investing, specifically a big difference between a good long-term contrarian value play, and a value/yield trap to be avoided like the plague.
So, let’s take a look at what I consider three yield trap REITs, CBL & Associates (CBL), Washington Prime Group (WPG), and Uniti Group (UNIT)
These are considered by many income lovers, to be either great long-term contrarian investments or value/yield traps to be avoided (depending on who you ask). I’ll show you a... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
CBL & ASSOCIATES PROPERTIES 1.38   0.0 -0.95 0.35 27.34
WP GLIMCHER 4.18   24.6 0.17 1.00 24.10


Older articles featuring Cbl & Associates Properties (CBL):
Upside-Down Week As REITs Stumble And Yields Surge
CBL Properties Declares Preferred Stock Dividends
Cashing In Dividends From Excessive Fear To Generate Income From Mall REITs
The Stunning Story Of Retail eREITs And Why Total Return Matters Even For Dividend Growth Investors - Part II
Washington Prime Group: Why A Dividend Cut Is Very Likely
Our High Yield REIT Portfolio: Q2 2019 Update
CBL Properties Declares Preferred Stock Dividends
Our High Yield REIT Portfolio Heading Into The 2nd Quarter
Washington Prime: Why I'm Short This 18% Yielder
Dividends By The Numbers For March 2019 And 2019-Q1