It’s Not Rocket Science, STAG Is Hitting All Cylinders

 In Free Articles

Summary

  • I am seeing more and more articles written on high-yielding REITs that offer no promise of dividend growth.
  • It’s almost as if the readers are being mesmerized by the double-digit returns with no warning that growth is not sustainable.
  • Today, I am going to provide a textbook example of one of my top Durable Income Portfolio picks using the dividend barometer methodology.

Recently, I was speaking with a friend of mine about the volatility in the retail REIT sector, and he was explaining that he decided to sell shares in Tanger Factory Outlet Centers (NYSE:SKT). As I explained to him, and also in an article yesterday:

“Only you can decide if the glass is half-empty or half-full. Investors must have an obligation to themselves to thoroughly analyze the underlying business and its prospects before purchasing a stock.”

One of the best ways for me to select the winners is to study dividend performance. When I see a company like Tanger increasing its dividend on a consistent basis, it provides a signal that earnings can be relied upon and that management is committed to growing the dividend.

Given the selloff in the REIT sector, I am seeing more and more articles written on high-yielding REITs that offer no promise of dividend growth. It’s almost as if the readers are being mesmerized by the double-digit returns with no warning that growth is not sustainable. As Josh Peters, author of The Ultimate Dividend Playbook, explains:

“A dividend payment is the ultimate sign of corporate strength… I take dividend increases as the loudest and clearest message that management can send.”

Dividend growth is not the only way to find the best REITs to own, but a dividend record can offer valuable clues, just as valuable as earnings reports and much more valuable than market timing.

In fact, one of the reasons that my Durable Income Portfolio has generated strong returns since inception (May 2013) is because I have weighted the picks based on the strength of the underlying dividend. I have found that dividend growth is one of the absolute best barometers for total return performance, as it simply blows away the performance of the “sucker yield” pickers.

Today, I am going to provide a textbook example of one of my top Durable Income Portfolio picks using the dividend barometer methodology. It’s not rocket science, STAG is hitting all cylinders.

A person standing in front of a blackboard Description generated with very high confidence

(Photo Source)

Not Your Typical Industrial REIT

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