Unlocking The Power Of REIT Dividends, Boom!

Summary

  • Trump’s visit to SC and especially his closing remarks cast a boom-like aura.
  • While in New York last week I had the opportunity to become a guest with Jane King at NASDAQ.
  • Viewed from the lens of a day-trader, rising rates are like kryptonite for REITs; however, viewed through the eyes of a fundamental investor, rising rates mean OPPORTUNITY.

Last week President Donald J. Trump visited my home state of South Carolina to deliver a speech at the Boeing plant in North Charleston, South Carolina. I was not able to attend the event (I was in NYC), but I read over the speech this weekend (view it HERE). President Trump said,

As your President, I am going to do everything I can to unleash the power of the American spirit and to put our great people back to work. This is our mantra: Buy American and Hire American.

Then the President went on to say,

Already American industry will come roaring back. And believe me if we — not me, I’m a messenger — if we didn’t have this victory, we wouldn’t be even talking about it. To achieve that goal, we’re going to massively reduce job-crushing regulations — already started; you’ve seen that — that send our jobs to those other countries. We are going to lower taxes on American business so it’s cheaper and easier to produce product and beautiful things like airplanes right here in America.

Then President Trump added,

America is going to start winning again — winning like never, ever before. We are not going to let our country be taken advantage of anymore in any way, shape or form. We love America, and we are going to protect America. We love our workers, and we are going to protect our workers. We are going to fight for our jobs, we are going to fight for our families and we are going to fight to get more jobs and better-paying jobs for the loyal citizens of our country.

As I glanced over the speech, it seemed to be just like another page in my book, The Trump Factor: Unlocking The Secrets Behind The Trump Empire. Although my book focuses on the businesses of the billionaire President, the speech resembled the transformative growth strategies that I touched on in my book.

The common denominator (of the speech and my book) is that it illustrates how Trump generates wealth using both mental and financial muscle, and his message last week boiled down to his commitment that the United States of America become a dominant force by negotiating deals with a strong position of strength.

Trump’s visit to SC and especially his closing remarks cast a boom-like aura signifying that new President will soon be unlocking not only the “power of the American spirit” but also the power of economic prosperity. He summed it up,

And we will pass on to our children the freedom and prosperity that is their American birthright. Our children will inherit from us a nation that is strong, that is proud and that is totally free. And each of you will be part of creating that new American future.

Unlocking The Power Of REIT Dividends, Boom!

While in New York last week I had the opportunity to become a guest with Jane King at NASDAQ. In the 8-minute video, I stated in the interview that the Trump presidency should extend the life cycle of U.S. real estate.

As I explained in an article last week, I am not a technical investor, I’m a value investor, but for those who pledge or be a technical investor there is little argument that we are in the early stages of acceleration in momentum.

Since Trump has been in office, the Dow Jones Industrial Average (DIJA) has returned 4.02%,”which would make the Dow’s performance in the Trump era’s first month the sixth best in percentage terms behind Franklin D. Roosevelt in 1945, after his fourth victorious campaign for the presidency, when blue chips climbed by 4.1%.” source

Source

Another way to look at it – as viewed through the lens of a technical trader – is that the market is more likely to be in the early rather than the late innings of what could be a sizable advance. So far, the market has followed this script and until it shows us something else, a steady upward trend remains the most likely direction of prices.

But hold off, I’m not market timer, I’m a value investor and while I like what I’m seeing with the so-called “Trump Bump”, the real estate market is also suggesting that there are extended innings to the recent REIT rally.

What about rising rates?

Viewed from the lens of a day-trader, rising rates are like kryptonite for REITs; however, viewed through the eyes of a fundamental investor, rising rates mean OPPORTUNITY.

Think about it like this. REITs make money by growing their dividends, and we can look back in time to determine that the best performing REITs were the ones that generated predictable dividend growth. For example, take a look at the list of dividend stalwarts (increased dividends at least 12 years in a row) to compare how they performed since December 31, 2009:

Had you known that these 13 REITs would be able to continue to increase their dividends during the Great Recession, you would have been able to generate around 14% Total Returns over the last 6+ years.

But wait, what if you can forecast the future by predicting which REITs can deliver dividend growth and provide a steady stream of reliable income?

In my upcoming edition of the Forbes Real Estate Investor I plan to provide subscribers with such a REIT roadmap. Utilizing qualitative and quantitative research, I will examine over 100 REITs and determine their best overall quality ratings, measured by historic and forecasted earnings and dividend growth. Quite simply, I will help you “unlock the power of REIT dividends”.

Check out The REIT Beat if you’d like to get more of my ideas, including early access to my highest-conviction REIT plays, access to Q&As with management teams, weekend REIT reports, and more. We’d love to have you on board, so have a look.

REITs mentioned: (NYSE:FRT), (NYSE:NNN), (NYSE:UHT), (NYSE:DLR), (NYSE:ELS), (NYSE:ESS), (NYSE:NHI), (NYSE:OHI), (NYSE:O), (NYSE:SKT), (NYSE:UBA), (NYSE:WPC), and (NYSE:HCN).

Author Note: Brad Thomas is a Wall Street writer, and that means he is not always right with his predictions or recommendations. That also applies to his grammar. Please excuse any typos, and be assured that he will do his best to correct any errors, if they are overlooked.

Finally, this article is free, and the sole purpose for writing it is to assist with research, while also providing a forum for second-level thinking. If you have not followed him, please take five seconds and click his name above (top of the page).

Disclaimer: This article is intended to provide information to interested parties. As I have no knowledge of individual investor circumstances, goals, and/or portfolio concentration or diversification, readers are expected to complete their own due diligence before purchasing any stocks mentioned or recommended.

Disclosure:I am/we are long APT, ARI, BXMT, CONE, CORR, CCP, CCI, CHCT, CLDT, CUBE, DLR, DOC, EXR, FPI, GPT, HTA, HASI, KIM, LADR, LTC, LXP, O, OHI, QTS, ROIC, STWD, SNR, STAG, SKT, SPG, STOR, TCO, UBA, VTR, WPC, PEI, EQR, DEA, MVEN.

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.