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Investment not only look at DY%. Also got capital gain. I got this share since 2019 and the gain is about 22%...divide over 6...yearly average capital gain is around 4%..add DY... Yearly profit about 9%. Not bad right?
Something to consider is, the REIT needs to pay at least 90% of its net income to continue to qualify as a “REIT”. So the dividend rate cannot go below that.
Dividend yield is a different metric. It’s calculated as dividend dollar amount / price per share. The REIT can reduce its dividend dollar amount, but it cannot go below 90% of its net income. IGBREIT’s dividend yield is lower than its peer because its share price may be overvalued, but not without reason. Share price is always forward looking, which means it usually reflects what investors expect the company or in this case, the REIT will perform in the future. The fact that its DY is 4.61% and lower than its peers could mean that investors may expect the DY to rise to 5 or even 6% in the future.
And because I bought mine much earlier...the average price or my cost of investment was lower... To me, the DY is more than 5% now. What's good about this counter is, they pay every 3 mth and not every 6 mth like PAV or SUN. Overall, I'm happy with this investment.
Thanks Chris, I got it the investor bought the shares are expect the financial results to be the expectation. The dividend will increase the reasonable yield. If the price still increasing, the QR need to improve at a greater rate for DY to reach above 5%(If I need a 5%), right?
Just example scenario