Dividend Danger Zone: 1 BDC And 1 REIT Facing Potential Cuts

Jun. 23, 2025 9:15 AM ET, , , , 6 Comments
Roberts Berzins, CFA
10.42K Followers
(10min)

Summary

  • I favor BDCs and REITs for their attractive yields and solid fundamentals, making them key components of my income-focused portfolio.
  • Yet, the current market conditions are unfavorable for both BDCs and REITs, with limited prospects for earnings growth, or price appreciation.
  • Despite bargain valuations, investors must remain cautious, due to heightened risks of dividend cuts and permanent capital impairment.
  • I highlight 1 BDC and 1 REIT as potential yield traps, where dividend reductions seem inevitable.

Dollar Sign Blocks with Scissors

porcorex

BDCs and REITs comprise a notable chunk of my income-focused portfolio. Both asset classes offer attractive yields, which for many industry players are backed by retirement-proof fundamentals. So, it is the combination of material dividends and high-quality fundamentals that have motivated me

This article was written by

10.42K Followers
Roberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other policy-level work includes the development of national SOE financing guidelines and framework for channeling private capital into affordable housing stock. Roberts is a CFA Charterholder, ESG investing certificate holder, has had an internship in Chicago board of trade (albeit, being resident and living in Latvia), and is actively involved in "thought-leadership" activities to support the development of pan-Baltic capital markets.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of O either through stock ownership, options, or other derivatives. 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.

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