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Dividend Don  

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  • Northstar Is Far From An Intelligent REIT Alternative [View article]
    Hi Brad,

    I owned NRF over the past year, and did well with it. However, when I bought it, I thought I understood it for the most part even though it seemed a little murky and externally managed, but maybe worth the risk. Then, things got more complicated with the spin-off and I decided I needed to spend a little more time researching the murky parts. The deeper I got into reading everything this company owns and does, the more murky it all became to me as to how all these parts fit together. That's exactly why I sold it very recently. They may do very well, but the big picture of how they are going to do that was not clear to me. STWD pays a similar dividend, is a lot more straightforward, and makes sense to me. I feel like it is the better choice for my risk tolerance.
    May 18, 2015. 09:05 AM | 2 Likes Like |Link to Comment
  • Mr. Market Is Trying To Send Us A Message About Omega Healthcare [View article]
    In my opinion, there is one major thing that has created a nice buying opportunity for OHI. The drop in stock price has little to do with the market, and a whole lot to do with a miscalculation of the dividend on many sites.

    OHI paid their regular dividend amount in two increments instead of one because of the timing of the AVIV merger. The total amount OHI paid out was the same, but many sites just use the latest number (which is only part of the quarterly dividend) to calculate dividend percentages. Because of this the dividend appears a lot smaller than it is on many sites right now. For example, and the Dividend Channel both show the dividend yield as 1.97% which is not correct. So, if one of your screens is for a dividend over 3%, it won't show up. It seems obvious to me that a lot of people are temporarily not finding OHI in the first place. I believe this has been the single biggest contributor to the price drop and will rectify itself when the next regular dividend (which will show up at the real rate which is currently just under 6%) shows up and the sites update the dividend data. In my personal opinion, this is a great time to buy.

    The other more obvious thing is that OHI said timing was off from the merger and that the funds will all make more sense after a few quarters. That will make all the numbers look better.
    May 1, 2015. 11:13 AM | 7 Likes Like |Link to Comment
  • Prospect Capital: A Cheap Cigar Butt? [View article]
    A couple of years ago I was a Prospect Capital bull. Here was a company that seemed a little different. They had gotten through 2008 with minimal damage. In 2010, they dropped their dividend from $1.64/year to $1.20/year and disguised it a little by going to monthly payments. That was much better than the average BDC out the other end of 2008. It appeared to be a lag effect. Then, the dividend stayed steady or increased very slightly to $1.33 by January of 2015. They never did get back to the $1.64. Their claim was that they would sell assets they bought at a profit and make more money than the average that way in addition to their steadier income. Given that their management didn't do too bad steering through 2008, it made sense and was a little different than how most BDCs operate, although most or all sell assets at times.

    Now, the dividend has been cut to about $1.00/year from that $1.64 in 2008. The probability that I am starting to lean towards is that the company is in slow demise. Management has not been able to make as much money as promised selling their assets at big profits here and there to bolster income which was supposed to be the key to them making more than the average BDC, and in fact has misrepresented their assets as explained in this article. Honestly, I just don't trust what they say. Their fees that they pay themselves are very high too. If they had used their money wisely, they might be justified. But, they haven't. I was in and out of this stock several times, and managed to make a little in the end by timing it. But, unless they get some new management and lower their fees, I'm not going back.
    Mar 28, 2015. 09:36 AM | 10 Likes Like |Link to Comment
  • Investing In High Dividend Yield Stocks: A Sucker Bet? [View article]
    I think that most high or very high yield stocks have high yields for a reason. However, a small percentage are overlooked, misunderstood, or bashed by incorrect logic or previous history. If you find one of them, ignoring it because of a general rule about ignoring high yield stocks can be a mistake. However, it does suggest that you do a ton of homework if you think you've found one. They are out there. They are usually under the radar of articles on sites like this or the yield would not be so high. There are exceptions to even that though. Some high yield stocks like NYMT or MAIN or O have done extremely well over time. You just have to be very picky.
    Mar 25, 2015. 09:52 AM | 1 Like Like |Link to Comment
  • Building A $100,000 High-Yield Income Portfolio From Scratch, Adding Position 2: New Residential Investment Corp. [View article]
    For high income, these are the ones I am comfortable with:

    Mar 19, 2015. 09:07 AM | Likes Like |Link to Comment
  • 13.8% Dividend New York Mortgage Trust Keeps Racking Up Gains; But Should You Worry? [View article]
    I have to go with NYMT management on this one. When all the other REITs were sinking over the last six years, this one just kept pumping out the dividends. I believe this is because the management has made good judgement calls at almost every turn. That is no guarantee that they will in the future, but nothing has changed to make me think they won't continue to make better decisions than the average mREIT. If all REITs a problem that effects them, it would be a setback which I would welcome as a buying opportunity. I have it in a DRIP and plan on undripping it in about a year for retirement unless management changes substantially.
    Mar 11, 2015. 02:18 PM | 1 Like Like |Link to Comment
  • I'm Waiting Patiently For Mr. Market To Ignore This Wide-Moat REIT [View article]
    I have some NRZ too. It looks like interest rates will be on a long very slow rise or steady for a number of years. If so, NRZ should theoretically do well longer term.
    Mar 10, 2015. 01:34 PM | 1 Like Like |Link to Comment
  • I'm Waiting Patiently For Mr. Market To Ignore This Wide-Moat REIT [View article]
    Thanks Charlie,
    That's some great information. Have to cogitate about that a bit! For my situation where I am looking for long term holdings, I'm not very concerned about how the market reacts. I am very concerned, however, about how increasing rates (short and longer term treasury rates) will effect the bottom line for these companies. Eventually, that is what will float to the top (or sink). You have some great info there.
    Mar 10, 2015. 01:32 PM | 1 Like Like |Link to Comment
  • I'm Waiting Patiently For Mr. Market To Ignore This Wide-Moat REIT [View article]
    Hi Brad,

    I am preparing for retirement in about a year, and so I have been focusing on sorting out stocks that are relatively safer but provide dividend income over 5% (I can live with 4.8% on O or really high quality candidates). To meet that goal, I have been reshuffling my portfolio to stocks with substantial records of increasing dividends (WPC, HCP, and OHI being examples), and with better than average short term prospects. For perspective, I also own a few riskier higher dividend REITs that I feel good about such as STWD, NRF, and even mortgage REIT NYMT. My REIT research has been from multiple sources, and I can truly say that your articles have been by far and away the most enlightening in the non mortgage REIT sector. Some of your speculation doesn't alway turn out to be right, but you couch it as speculation, and given how many unknowns are always out there, you are at the top of your classs. Thank you.

    Up until two years ago, I was mostly short term trading in high risk/high reward dividend stocks and wrote a few articles about them on here. My idea was simply that most very high dividend stocks are very high for a reason (huge risks), but not all. So, why not look for them. Overall, I beat the market using that strategy, but there were huge gains and huge losses and I am not at a stage of life where I want to take those risks anymore.

    So, here's what I'm thinking about and would love to hear more of your thinking about. Here we go - Some not really unexpected news comes out suggesting interest rates might go up a little at some time over the next 6 months. There has been some panic selling from those who think REITs are going to take a hit from this as their borrowing costs will go up or those who know better, but think REITs will sink because other people think that and are looking for a lower buyback opportunity.

    There are certainly some REITs that will be more impacted by rates (positively or negatively) and you mention some of them here and there in your articles. So, in your opinion, which REITs are likely to be most effected in a negative way from an interest rate increase, and which ones are most likely to be effected in a positive way from interest rate increases. You have mentioned O and WPC as being a couple that are less likely to be effected. How about your top and bottom five?

    I can't thank you enough for all the information you provide


    Thanks so much for your articles.
    Mar 10, 2015. 12:08 PM | 1 Like Like |Link to Comment
  • Where's The Trust In Hospitality Property Trust? [View article]
    To me, this begs the question. If a lot of similar properties have performed better, another possibility is that HPT is simply underpriced and will make up the difference. Another one is that it was overpriced relative to the others a years ago.

    So, I'm not sure that previous outperformance has much meaning?
    Feb 26, 2015. 09:19 AM | 2 Likes Like |Link to Comment
  • Unlocking The Power Of Compounding: REITs That Pay Monthly [View article]
    Thank you. I need to put my glasses on. Was looking at the 62% payout ration on IRC!
    Jan 15, 2015. 01:14 PM | Likes Like |Link to Comment
  • Unlocking The Power Of Compounding: REITs That Pay Monthly [View article]
    Hi Brad,

    I had some heart issues a few years back that limited my activity on SA for awhile. Now, I am in a situation where I have made a 100% recovery, and am one year away from retirement. I have been juggling things for a couple of years and will need income more than growth, but income with moderately safe growth (even if slow) would be a good goal.

    I had a nice run with mortgage REITs a few years back and was lucky enough to get out at the right time on almost all. I did keep NYMT and PMT for the long haul and (till now at least) I'm glad I did. My more recently my experimenting with BDCs was less fruitful, although I do still own and plan to hold MAIN, TCAP, and PNNT into retirement.

    The lesson learned from the BDCs was to turn over every stone on every investment with an understanding that things can always go wrong, and that I need to pay attention on a regular basis. With that in mind, I was looking at your charts above and IRT sticks out to me. They have a very low relative payout ratio in spite of sizeable dividend increases and their P/FFO is one of the lowest. So, in my investigation which involves turning over stones, I thought getting your input could be a good place to start. I didn't see any articles you had written on it, and it is only about 18 months old. It does pay a whopping 7.66% monthly dividend. I currrently own WPC, OHI, HPT, STWD, NRF. Do you think IRT is worth considering and what stone(s) can you turn over in my quest for retirement?

    Thanks - Don

    Jan 15, 2015. 09:49 AM | Likes Like |Link to Comment
  • New York Mortgage Trust: The Best Buying Opportunity Of The Quarter [View article]
    If you take a look at the dividend chart at -
    you will see that the divided was 5¢ in 2007, 6¢ in 2008, and is 27¢ now. There have been a few bumps up and down in the dividend, but on average it has been a very steady climb.

    My opinion - I don't believe any other REIT has even come close to increasing dividends (on average) as much as NYMT since the 2008 fiasco. This is one of my largest and longest holdings and I plan on dripping it till I need the income. Just added some more at $7.75. What a bargain.
    Nov 22, 2014. 10:52 AM | 4 Likes Like |Link to Comment
  • Medley Capital: An Attractive Hedge For BDC Portfolios [View article]
    How does the "Overstatement" you are referring to compare to other BDCs, and how much would it effect NII in the best and worst and average case scenarios? The way I am reading this article, you are presenting the worst case scenario.
    Sep 16, 2014. 10:25 AM | 2 Likes Like |Link to Comment
  • Prospect Capital: How Secure Is The 12% Dividend Yield? [View article]
    I agree. However, one concern I have is that short rates may not go up much, if at all. Over the last few years, Bill Gross, who runs PIMCO has called interest rates pretty well at times. He believes we may be in for a long run of low interest rates for years and that after the fed stops tapering, there may be minimal or no increases for a long long time. He thinks inflation will stay very low for literally years to come. Stagflation. I am starting to buy into that myself.

    PSEC has bet that interest rates are going up. If they don't, I (who have been a PSEC bull for a long time), think they will have to cut the dividend. I sold my position completely the other day right before earnings because I didn't like the way they stalled around putting the numbers out. My gut check said that they should have been in more of a hurry if they had good news. That may have been a stroke of luck, but I think I'm going to put my money elsewhere till it all becomes a little more clear.
    Aug 27, 2014. 10:01 AM | Likes Like |Link to Comment