Anybody noticed how many articles per day you can read suggesting a dividend is secure, only to see the following week that it has been cut?!Lotsa writers with substantially less ability to see the big picture out there, imo.Brad Thomas, though, smartly staked his "3 Fortress REITs" article to 3 REITs whose next dividend far enough into the future so as not to be embarrassed within one or even 3 weeks. (I still don't know the he is right about the REITs whose dividends he considers "safe".)
Yeah, I know it seems a lot of folks missed the "preserve capital theme" that seems to be the REIT message now. A lot of folks (analysts, too) did not expect the ROIC dividend suspension, just a reduction. DavidLong ROIC
"Opinions are like...." Yadda yadda yaddaIn addition to the dividend line, you also get the value line -- such and such is at a generational value. One wonders if these writers were old enough for the last recession, when good stuff was down 60%+. That may be true of a few things, but many of the large caps are not that far off highs or are making new ones, FB and AMZN, for example. I think the only dividends that have a decent chance of not being cut substantially are some of the preferred dividends. And even then I'm not super sanguine on some names. Lodging REITs? Their common dividends are done, but if business rebounds even to just a low level in the next two months -- they might *MIGHT* -- be able to afford the preferred dividend in three months. Others such as CTRE should be fine, dividend-wise, I'd guess. But I'm not really interested in buying much these days, given what I think are still massive downsides and ones that have their best solutions in many actions that would be lambasted as socialism (government paying for workers directly, for ex). Of course, one man's socialism is another man's life preserver. This is my way of saying that the "solutions" that are likely to be implemented here are not going to be very effective due to ideology. So I expect this crisis to drag out longer than it ought to. But this all remains to be seen. One thing I feel reasonably confident about is that not enough of this downside has been priced into stocks. And the strength of the large and mega caps is obscuring real weakness in almost everything else. The rallies are increasingly concentrated in fewer stocks. And when that crowding effect plays out, the headlines will start to turn negative again. Jim
Yeah, I think a lot of people are blind to how broad the weakness coming out of this is going to be, and how widely those weak areas are going to affect nearly everything (if not Everything) else. It's taking a lot of willpower for some to remain in denial as to what is coming.RobAlthough, I also was very impressed with this quote: "[T]his quarter, driven by the strength of our commercial cloud. As COVID-19 impacts every aspect of our work and life, we have seen 2 years' worth of digital transformation in two months. From remote teamwork and learning to sales and customer service to critical cloud infrastructure and security, we are working alongside customers every day to help them stay open for business in a world of remote everything." from Satya Nadella, CEO of Microsoft in their earnings call.To me, that says a lot for cloud-tech companies, but it should also make a commercial-office REIT investor tremble?
Yeah, I think we're seeing an acceleration of some trends that were already in place. Cloud and internet retailing being two of the larger ones. I mean, AMZN is actually up at all-time highs now. That said, I think we're so early in the process here that the good sectors are not feeling the contagion yet. Business investment has been slashed quickly, and that may take a bit more time to cycle through. Human psychology has not yet caught up to the impending reality, I think. Subprime "was contained" until it wasn't. :-)Jim
but it should also make a commercial-office REIT investor tremble? Yeah, I haven't owned an office REIT in a long time. And won't in the future.David
Amazon, in particular AWS, used to insist on folks come to office and not encourage working from home. Now, they have pushed the working from home to October, that is for the next 4 months. It is combination of Amazon's risk perception and their views changing on WFH. The post COVID world is going to be different on many ways, I think it is bit early to predict or plan.
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