Published Thu, 30 Apr 2020 12:30:25 -0400 on Seeking Alpha
Mortgage REITs have reduced or eliminated their rich dividends.
135 companies have announced in 2020 through Monday morning that they would reduce their dividends.
All dividend actions so far this year through Monday amount to a cut in payouts of about $22.8 billion, according to S&P Dow Jones Indices, cited by the Wall Street Journal.
Dividend yield can be an irresistible siren song in the era of central bank interest rate and bond yield repression: Harley-Davidson's (NYSE: HOG) dividend yield was over 7% until this morning - when it announced that it would slash its dividend by 95%, from 38 cents to a symbolic 2 cents to conserve cash. Going forward, the dividend yield will be close to 0%.
GM (NYSE: GM), whose dividend yield was an alluring 6.5%, announced yesterday that it would eliminate its dividend altogether to save about $2 billion in cash; and going forward, its dividend yield will be 0%. Ford (NYSE: F) had a dividend yield of over 11% before it eliminated its dividend.
Mortgage REITs have reduced or eliminated their rich dividends - and dividends are the primary reason to hold REITs. This started in late March, when AG Mortgage Investment Trust (NYSE: MITT) announced that it would stop paying dividends. Invesco Mortgage Capital (NYSE: IVR) and TPG RE Finance Trust (NYSE: TRTX) both said they would "delay" paying their previously announced dividends to preserve liquidity. In April, AGNC (Nasdaq: AGNC) announced that it would reduce its dividend by 25%.
All of them had theoretical dividend yields well into the double digits. Invesco's theoretical dividend yield - which reflects the past annual dividend payments as a percent of current share price - is over 60%.
Mall REITs are under enormous pressure, with most of their tenants shut down and many of them not paying rent. For example, Macerich (NYSE: MAC) announced mid-March that it would reduce its dividend from 75 cents a share to 50 cents, of which it would pay only 20% in cash and the... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|AMERICAN CAPITAL AGENCY||15.64||0.0||-1.54||1.92||12.21|
|INVESCO MORTGAGE CAPITAL||15.18||0.0||-1.01||1.80||11.80|
|AG MORTGAGE INVESTMENT TRUST||17.47||6.1||2.87||1.90||10.89|
|LAS VEGAS SANDS||60.15||24.1||2.50||3.08||5.22|
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