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Richard Berger
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Mr. Berger is the creator and developer of the YDP screening tool, a chart system and its analysis for screening and monitoring dividend income equity investments. The recipient of Seeking Alpha's Outstanding Performance Award, he also has been Seeking Alpha's #3 ranked Author for Income... More
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Income from covered option writing
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Income From Covered Option Writing
  • YDP Chart For ARI  0 comments
    Mar 18, 2013 2:42 AM | about stocks: ARI

    The YDP chart for ARI is provided here as part of my comment on my fellow author's current article regarding the company. Readers not familiar with my YDP charts may wish to review my other articles about them including:

    BP Prudhoe Bay Royalty Trust: Introducing A New Dividend Income Screening Tool

    Double-Digit Yields. Be Sure You Get The mREIT Facts Before You Leap

    The YDP chart for ARI is presented below.

    ARI Chart

    ARI data by YCharts

    Contrary to the claim that ARI has a reliable steady 9+% yield, this chart clearly shows that while the distribution has remained steady since the third quarter 2010, the yield has been steadily declining in direct inverse relation to share price rise. This is in complete agreement with the Y = D/P (Y for Yield, D for Distribution, P for share Price) mathematic relationship linking the 3 values. Share price has continued to rise since the third quarter 2011 with corresponding declining yield rates. Current effect yield rate has in fact fallen below its mid 2011 levels. Clearly, the market anticipates a hike in dividend distribution soon or the shares are setting themselves up for a possible retreat. I suggest a very in-depth fundamental analysis of valuation of these shares, both internally and in relation to risk adjusted alternatives of peer REITs, before deciding on any investment in the ARI shares.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: ARI
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