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Urstadt Biddle: Requiem For A Long Dividend Streak, And Hope For The Future


  • "Stock prices are only opinions, but dividends are facts." That was stated back in October, 2019. The situation has changed since then.
  • What are the facts surrounding UBA's 75% dividend cut? How long can it be expected to remain in the doldrums before bouncing back?
  • Things weren't as been as one would have guessed in Q2, which included both March and April for UBA.
  • I view the dividend cut as being due to management's desire to maintain the strength of the balance sheet as well as for financial flexibility during this difficult and uncertain period.
  • There are good reasons to hang onto shares and perhaps even to buy more.

Investment Thesis

On the investors webpage of shopping center REIT, Urstadt-Biddle Properties (NYSE:UBA, UBP), the phrase "uninterrupted dividends since 1969" is proudly and prominently displayed. And in the REIT's 2019 annual report, the first page boasts "50 years of uninterrupted dividends" and "26 consecutive years of increased dividends."

Sadly, the dividend growth streak has come to an end, and if we define "uninterrupted" as equating to "uncut," that streak has ended, too. Though the company paid their regular Q1 dividend, they have decided to slash their Q2 dividend by 75%, from 28 cents per share to 7 cents per share (100% of taxable income). Management has stated that the Board's intention is to only pay out the REIT's taxable income (net income) for the foreseeable future, which means that UBA almost certainly won't be able to make up its reduced dividend in the second half of the year.

Thus marks another long, time-honored dividend streak ended by the ravages of the coronavirus pandemic.

"Stock prices are only opinions," says the first page of the latest annual report, "but dividends are facts."

Well, what are the facts surrounding this dividend cut? Should it prompt dividend-focused investors to sell shares and move on to other opportunities? Have the fundamentals of the company irreversibly deteriorated due to COVID-19?

In what follows, I will explain why I do not believe UBA's fundamentals have permanently deteriorated as well as why I do not believe shareholders should sell shares. On the contrary, I have been buying over the last few days.

Source: 2019 Annual Report

Urstadt Biddle in The Midst of a Pandemic

UBA primarily owns shopping centers but also a few net leased restaurants, bank branches, office buildings, and one child care center, all located in "in the suburban, high demographic, high barrier to entry communities surrounding New York City" (quoting the website's

This article was written by

Austin Rogers profile picture
Become a “Passive Landlord” with our 8% Yielding Real Estate Portfolio.

I write about high-quality dividend growth stocks with the goal of generating the safest, largest, and fastest growing passive income stream possible. My style might be called "Quality at a Reasonable Price" (QARP) in service to the larger strategy of low-risk, low-maintenance, low-turnover dividend growth investing. Since my ideal holding period is "lifelong," my focus is on portfolio income growth rather than total returns.

My background and previous work experience is in commercial real estate, which is why I tend to heavily focus on real estate investment trusts ("REITs"). Currently, I write for the investing group, High Yield Landlord.

Analyst’s Disclosure: I am/we are long UBA, ALEX, FRT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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