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Now Is Not The Time To Be A High-Yield REIT Investor

Published Wed, 18 Mar 2020 07:01:00 -0400 on Seeking Alpha

We’re living in an all new paradigm in which the world is being shut down by social distancing.
We’ve put together a stress test guide designed to steer investors away from high-yielding REITs. We want to focus on the safest names instead.
I’ve trained 30 years for this black swan. Now it’s time to go to work.
Have you ever heard of black swans?
Not the bird. Those exist too, of course, and they’re apparently not as rare as they once were.
But what I’m talking about is the event – the kind that nobody wants to see and nobody usually does - but that still lurks in the shadows regardless, waiting for as random a moment as possible to jump out and say, “Boo!”
Sound familiar?
I’m sure I don’t have to tell you how, in the middle of an amazing economy and stock market, we got jumped. COVID-19, also known as the coronavirus, has spooked us for sure.
I’m also sure I don’t need to point out how horribly the markets fell earlier this week. It was painful, to say the least. Painful and very, very real.
There’s no getting around that fact.
Yet, if someone had suggested such a possibility back in December of last year – or even this January – they would have been pegged as crazy and scoffed out of the room.
With good reason, when black-swan events are exceptionally rare and even more elusive. You have to be an economic prophet to predict them.
I’m not a prophet, and I don’t claim to be one. But I'm a man of conviction and principle, two qualities that existed both before the coronavirus hit and after.
Therefore, I’m going to tell you the same thing I’ve been telling you for over a decade now…
It’s all about quality. Accept nothing less.
Chasing Yield Is the Opposite of Concentrating on Quality
I know you’ve heard me say this time and time again on Seeking Alpha. But given the context of the current pandemic, let me repeat myself as strongly as I can:
“Now is not the time to... 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
MACERICH 33.33   43.9 0.76 3.00 8.91
WHITESTONE REIT 13.84   25.2 0.55 1.14 8.62
HERSHA HOSPITALITY TRUST 15.01   0.0 -0.54 1.12 7.42
ASHFORD HOSPITALITY TRUST 3.22   0.0 -1.82 0.24 7.34
PREFERRED APARTMENT COMMUNITIES 14.60   0.0 -1.61 1.05 7.19
UMH PROPERTIES 13.64   0.0 -1.18 0.72 5.26
PEBBLEBROOK HOTEL TRUST 28.65   0.0 -0.41 1.52 5.23


Older articles featuring Cbl & Associates Properties (CBL):
Retail REITs: Double-Digit Yields, Secular Shifts And Mean-Reversion
We Need To Talk About Dividend Cuts - They Are A Necessary Evil
REIT Preferreds: Higher-Yield Without Excess Risk
Dividend Cuts And Overdue Rent: REIT Earnings Recap
Our High Yield REIT Portfolio - Optimizing Rebound Potential
Macerich: Debunking Three Bear Theses, Including Why I Want A Dividend Cut
Introducing This Growing Dividend Portfolio
Washington Prime Is Undervalued Regardless If It Cuts The Dividend
Our 2020 High Yield REIT Portfolio
These REITs Are Likely To Cut Their Dividend In 2020