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Brad Thomas  

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  • Bluerock Residential Pays 8.5%, Should I Buy It?
    Tue, Feb. 17 BRG 25 Comments

    Summary

    • Oftentimes, many investors consider a high-paying yield to be a BUY indicator, when in fact, it's the opposite.
    • In order to grow value, Bluerock must focus on deleveraging its balance sheet and re-working its capital stack.
    • That's stressful for us retail investors, as none of us want to get ARCP’d.
    • The last thing I want to do is invest in a high-yielding Apartment REIT and then watch the dividend get torpedoed.
  • This Uniquely Positioned Net Lease REIT Pays 5.9%, But Wait For Pullback
    Editors' Pick • Mon, Feb. 16 EPR 61 Comments

    Summary

    • Most Net Lease REITs strive for higher investment-grade tenants, since there is a much lower probability for lease defaults.
    • Another way we can examine EPR, based on intrinsic value, is to use the “Gordon Growth Model”.
    • The Gordon Growth model does indicate the shares are cheaper, but that doesn’t take into consideration overall tenant credit quality.
    • HASI is the high-credit backed REIT and EPR is the knowledge-based REIT - kind of like comparing apples to oranges.
  • Forget Beaten Up Utilities, Buy This 7.1% Clean Energy REIT
    Editors' Pick • Fri, Feb. 13 HASI 171 Comments

    Summary

    • My attraction with utility stocks is related to the sustainable attributes that make the defensive asset class virtually recession proof.
    • It’s important to understand that HASI is a REIT but it’s really considered more of an investor in clean energy assets.
    • HASI has an attractive portfolio of assets that are 97% investment grade.
    • HASI is clearly not a utility stock but I believe the financier of clean energy is a sound sector with similarly reliable attributes.
    • I am recommending shares at the current price level and I believe a big part of the discounted valuation is reflected in the modest coverage (investor) base.
  • Charlie Brown's Under The Radar $10 REIT Portfolio
    Thu, Feb. 12 AHH, AHT, APTS 32 Comments

    Summary

    • I’m looking to avoid the same bad luck that Charlie Brown avoids…the goal for both of us is to stay away from the rocks.
    • Fidelity MSCI REAL ESTATE INDEX ETF charges a .12% management fee ($12 for every $10,000 invested), a tad more than the industry-leading Vanguard REIT ETF (VNQ) that charges .10%.
    • Given the small-cap composition of the portfolio, I would expect to see above average results - that's seeking alpha!
  • Is Xenia REIT Protecting Dividends Like The Greek God Protects Travelers?
    Wed, Feb. 11 XHR 20 Comments

    Summary

    • Zeus exemplified the religious responsibility to be hospitable to travelers, and I suppose my obligation is to determine whether or not Xenia Hotels & Resorts is generous to investors.
    • Since listing shares a few days ago, Xenia has have fallen by around 10%, with a market close of $20.91.
    • The brokers who sold the non-traded shares are likely pursuing their clients to sell the shares to reinvest in another non-traded REIT (ka-ching, ka-ching).
    • The true meaning (of Xenia) is to protect the traveler, and that's similar to the mantra of the SWAN (sleep well at night) - protect your principal at ALL costs.
  • HCP Inc. Slides On Woes Related To Its Top Tenant
    Wed, Feb. 11 HCP 66 Comments

    Summary

    • HCR ManorCare said that it "has responded to a Civil Investigative Demand, subpoenas and other requests for information regarding their skilled nursing facilities.".
    • HCP derives around 90% of its post-acute revenue from HCR, or 29% of HCP's overall revenue.
    • There’s a better BUY price now and HCP has provided a game plan to limit exposure and increase overall profitability.
  • Waiting On Monmouth To Be A Booster, Not Just A Rooster
    Tue, Feb. 10 MNR 16 Comments

    Summary

    • I see more clarity that Monmouth will be in a position to meaningfully grow its AFFO per share going forward.
    • When I look at Monmouth’s dividend history, it appears the company is acting more like a utility than a REIT.
    • I need a dividend booster, not just a share price rooster.
  • An Attractively Priced 'Build-To-Suit' REIT That Yields 6.1%
    Mon, Feb. 9 LXP 73 Comments

    Summary

    • Lexington Realty has a substantial pipeline of build-to-suit deals of around $500 million.
    • Lexington has recently entered another property category - arguably the safest asset category in the real estate sector - ground leases.
    • I’m continuing to plow funds into Lexington (no more than 5% of my REIT portfolio though) as I believe 2015 will be the turning point year.
  • There's A Reason Utilities Are On The Monopoly Board, I Just Bought One
    Editors' Pick • Mon, Feb. 9 CTWS 94 Comments

    Summary

    • Today I am going to stay on the Monopoly board and discuss a close cousin to REITs, Utilities.
    • I see strong correlations to real estate and utilities - they both deliver essential services measured by a long runway for demand.
    • There's a reason utilities are on the Monopoly board… you can't win the game by owning just real estate.
  • Capitalizing On Mispriced Risk With REITs Exposed To Texas
    Fri, Feb. 6 BRX, CPT, EGP 51 Comments

    Summary

    • A handful of REITs with exposure in Texas are not feeling the love.
    • United Development Funding has fallen off by around 21% since the company listed shares on June 4, 2014.
    • East Group Properties, in a release this week, stated that <5% of their space in Houston is expiring in the next 2 years with energy tenants.
    • My best consumer confidence barometer is my debit card.
    • As I see it, consumers are saving at the pump, and spending it buying stuff.
  • Why Buy A CD When I Can Buy W.P. Carey?
    Wed, Feb. 4 WPC 148 Comments

    Summary

    • I place considerable value on the Net Lease REIT management teams who have been able to provide meaningful differentiation in both sourcing deals and managing portfolio risk.
    • One of the best ways to measure quality is to examine a company’s dividend history.
    • I know that I’m not getting any meaningful compounding benefits at the bank.
  • Starwood Waypoint Residential Has All Of The Ingredients For Something Special
    Editors' Pick • Tue, Feb. 3 SWAY 14 Comments

    Summary

    • Starwood Waypoint Residential is likely to benefit from the fragmentation and strong macro-level characteristics.
    • SWAY's business model has well-defined channels in which the growing REIT can take advantage of the enormous fragmentation and capitalize on the efficiencies generated through economies of scale.
    • As I see it, most great franchises or brands come in packs of three.
    • My point is that I see SWAY as one of the big consolidators, and that's the bet you are really making on this company.
  • I Love The Irreplaceable Assets, But I Need A 5% Dividend Yield To Excite Me
    Editors' Pick • Mon, Feb. 2 UBA 26 Comments

    Summary

    • "For companies with meaningful yields, I take dividend increases as the loudest and clearest message that management can send." - Josh Peters.
    • Urstadt Biddle's capital structure is uncommon, with two classes of common stock.
    • I had a few chances (last year) to pick UBA last year at a 5% dividend yield.
    • Urstadt Biddle is definitely a buy-and-hold candidate, and I need to plant a 5% seed before I begin to start harvesting the crops.
  • A Sleep Well At Night REIT That Just Boosted Its Dividend
    Fri, Jan. 30 HCP 59 Comments

    Summary

    • A few weeks ago I listed some of the "most predictable REITs". Within that list of wide moat companies we can see that a majority have moved into a moderately valued price range and a few have become quite expensive.
    • When I compare HCP with the peer group I can see that the company is trading at fair value, unlike many of the other similarly capitalized peers.
    • HCP is the only REIT in the S&P 500 Dividend Aristocrat Index.
    • This is the 30th consecutive year that HCP has increased its dividend and the annual distribution rate now advances to $2.26 per share.
  • What Is The World's Largest Net Lease REIT Worth?
    Thu, Jan. 29 ARCP 210 Comments

    Summary

    • The margin of safety is the essence of value investing, because it's the metric by which hazardous speculations are segregated from bona fide investment opportunities.
    • Green Street Advisors has devoted considerable resources to the NAV-based tool, and the company said "it has always been the driver of (its) valuation conclusions".
    • After adding back in the cash balance (from the ARCP filing dated June 30, 2014), I arrive at an estimated Net Asset Value for ARCP of $8.48 per share.
  • Beware Of The Sucker Yield: Bumpy Roads Ahead For Wheeler REIT
    Editors' Pick • Tue, Jan. 27 WHLR 37 Comments

    Summary

    • "This chase for yield in the stock market leads to the same thing that all such chasing leads to – impulsively reacting to dividend quantity over dividend quality". - Investopedia.
    • I decided to take a closer look at Wheeler to determine whether or not the Virginia Beach-based REIT was operating within the high-risk makeup that's characterized as a "sucker yield".
    • The bigger problem with Wheeler is that the company has not covered its dividend since going public, and it's likely that the source for the dividend will be below the $.42 payout in 2015.
  • People Have To Eat: Brixmor's Dividend Should Soar
    Editors' Pick • Tue, Jan. 27 BRX 15 Comments

    Summary

    • Brixmor is the largest "pure play", wholly-owned, grocery-anchored shopping center REIT.
    • Around 70% of Brixmor's revenue is generated from grocery-anchored assets.
    • "People have to eat". I know that sounds funny, but that's one of the main reasons I'm recommending shares in Brixmor.
    • Brixmor has the lowest payout ratio (of all shopping center REITs), so it has the strongest potential to outperform.
  • Is Now A Good Time To Buy STAG?
    Mon, Jan. 26 STAG 21 Comments

    Summary

    • Overall the industrial sector experienced the strongest improvement in property fundamentals of any property sector nationally.
    • STAG’s strategic risk assessment model has performed well as evidenced by the acquisition history – the company's stated goal is to grow the portfolio by 25% annually.
    • I’m revising my FAIR VALUE Target from $22 to $24 per share as I expect STAG to continue to accelerate above average earnings growth.
  • A Predictably Profitable Hotel REIT That I Would Like To Own
    Editors' Pick • Mon, Jan. 26 LHO 9 Comments

    Summary

    • LaSalle's average dividend increase over the last 4 years is around 60%.
    • One often overlooked metric is Return on Invested Capital, or AFFO/Debt & Equity.
    • ROIC is an important profitability ratio because it tells us if the company is turning its capital into profits.
    • I could have picked up LaSalle at close to a 4% dividend yield (90 days ago), so I'll wait for a better entry price today.
  • LTC Properties CEO Reveals The Secret Recipe For The REIT's Success
    Fri, Jan. 23 LTC 13 Comments

    Summary

    • Wendy Simpson has been CEO and president of LTC since 2007 and she was appointed Chairman of the Board in August 2013.
    • "With the cost of money today, we will be using our available leverage to invest in development properties and accretive sale/leaseback properties." Wendy Simpson.
    • "We are also, probably the least levered health care REIT." Wendy Simpson.
  • The Underdog REIT Barks Up This Inaugural Preferred Issue
    Fri, Jan. 23 CORR 9 Comments

    Summary

    • There is no premium for the Change of Control as you would see in most bond issues.
    • This preferred is unrated, but would most likely be lower-rated than most of the peer group.
    • Investors will notice that CorEnergy's preferred stock has a lower yield than its common stock.
  • Mr. Market Likes Uncle Bob And So Do I
    Fri, Jan. 23 SSS 6 Comments

    Summary

    • Sovran has surpassed the dividend payouts prior to the recession as the company recently increased its quarterly payout from $.68 to $.75 per share.
    • Upon closer examination, we can see that the Sovran shares are a “tad” expensive and what I’m really telling you is that this is a good pick when shares pull back.
    • Bottom Line: Mr. Market Likes Uncle Bob and So Do I.
  • I Just Got Another Raise: Thanks Realty Income
    Thu, Jan. 22 O 69 Comments

    Summary

    • Maybe a dividend increase seems boring to you but to me a dividend boost is almost like a message telegraphed to shareholders that the company can “take a lick’n and keep on tick'n".
    • Oftentimes, we (investors) view dividend increases as less meaningful headlines when in fact, they are almost always great road maps for projecting the future success of a security.
    • I have no interest in selling my shares and while I deem the security fairly-valued, I see tremendous opportunity for the company to extend its moat.
    • I see no catalyst that supports a SELL, especially since management just telegraphed me a sign that says, “I’ve got your back covered”.
  • I'm Doubling Down On Gramercy Property Trust
    Editors' Pick • Wed, Jan. 21 GPT 50 Comments

    Summary

    • I was able to research Gramercy in great detail and that investment is paying off – big time!
    • Gramercy may enjoy some of the same characteristics as ARCP; however, I consider Gramercy an investment.
    • That commitment suggests that Gramercy is continuing to build brand equity around the most powerful forces in a dividend investor’s toolbox: durability.
    • The latest 43% dividend increase was important for me as it validates the most meaningful message that management can send to an investor.
  • Physicians Realty Reports Healthy Acquisitions With Growth Off The Charts
    Editors' Pick • Mon, Jan. 19 DOC 38 Comments

    Summary

    • As suspected, DOC shares traded down when the secondary was announced and they rebounded for a weekend closing price of $16.99.
    • Considering the robust growth we have seen since DOC hit the public spotlight, I consider the value proposition promising.
    • I definitely plan to hold onto my shares as I believe there's above average upside as DOC ramps up its overall quality rating.
  • Chatham Rings Up A 25% Dividend Boost
    Fri, Jan. 16 CLDT 26 Comments

    Summary

    • Hotels have been riding high on the rebound and that string demand has bolstered key operating fundamentals such as occupancies, average daily rates, and revenues per available room.
    • Operationally Chatham is well-positioned to increase room rates, with high occupancy (around 84.3%) that increases ADR, driving profits higher.
    • It was no surprise to see a 25% dividend increase this week.
  • Unlocking The Power Of Compounding: REITs That Pay Monthly
    Thu, Jan. 15 ARCP, ARR, CLDT 36 Comments

    Summary

    • By utilizing compounding, your portfolio amplifies the growth of your working money and maximizes the earning potential of your investments.
    • While compounding is certainly a good way to build wealth, some investors invest in monthly paying stocks for a variety of other reasons.
    • Instead of depositing your dividend checks in the bank, think of yourself as the bank.
  • Extra Space Is A Trusted Brand To Buy When Mr. Market Is Snoozing
    Wed, Jan. 14 EXR 25 Comments

    Summary

    • There is little doubt that rates are going to likely move up this year, and that could offer investors with the opportunity to take advantage of the REITs that grow.
    • What I find most attractive about Extra Space is the highly innovative branding model, in which the company sources customers by multiple outlets: internet, call center, and drive-by.
    • I believe that EXR has an extremely visible competitive advantage in its advanced technology assets.
    • This is not a stock I would buy today, but put it on the "wish list" so you're prepared when Mr. Market is snoozing.
  • My REIT Underdog Pick For 2015
    Tue, Jan. 13 CORR 62 Comments

    Summary

    • CorEnergy primarily owns midstream and downstream U.S. energy infrastructure assets subject to long-term triple net participating leases with energy companies.
    • Formerly a business development company, CorEnergy restructured a little more than a year ago to become an energy infrastructure-focused REIT.
    • CorEnergy's business is not as heavily regulated as utilities; the risk is greater but so is the return.
    • From a historic earnings perspective, CoreEnergy appears to be an attractive REIT based on valuation risk.
  • Don't Get 'Sharked' By Manhattan Bridge Capital
    Mon, Jan. 12 LOAN 15 Comments

    Summary

    • Manhattan Bridge Capital is a "hard money" lender.
    • While it sounds promising to invest in NYC assets, I see no value in the puny 6.9% dividend yield.
    • "Shark yield": a yield backed by hard money lenders.
  • A Uniquely Positioned REIT You Can Buy Under $10
    Editors' Pick • Mon, Jan. 12 AHH 31 Comments

    Summary

    • One of the new REITs on the “Charlie Brown” list is Armada Hoffler Properties.
    • I consider the substantial Insider ownership a good indicator that management is interested in creating value.
    • I believe the shares are mis-priced and there appears to be a likely dividend increase on the horizon.
  • The World's Largest Net Lease REIT Is Ripe For A Takeover
    Thu, Jan. 8 O, ARCP 170 Comments

    Summary

    • "The biggest catalyst for revived activity is today's new breed of activist investor" - Mike Kirby, chairman of Green Street Advisors.
    • With the latest Corvex news, I am more confident that ARCP is "ripe for a takeover", and that could include a private or public investor - or both.
    • If Realty Income were to acquire a large majority of ARCP's assets, I believe it would present the opportunity for continued accelerated FFO growth.