Take Charge! CyrusOne Gets An Upgrade
- “Durability implies that the firm can take a financial punch in one year and come back swinging the next.” Josh Peters.
- “Dividends represent a commitment by a company to its shareholders – a commitment that many of those shareholders are counting on for income.” Josh Peters.
- “Dividend increases – even more than current earnings or earnings projections – are a forward-looking indicator of growth and total return prospects.” Josh Peters.
- CyrusOne is now an official SWAN.
I purposely called my new REIT research platform the “Rhino” because I wanted my audience to recognize the most important attribute when it comes to stocks. As I began to ponder the various mascots for the research portal, I became fixated on the durability attributes that are so critical to investing. As Josh Peters points out,
“Durability implies that the firm can take a financial punch in one year and come back swinging the next.”
Toughness is an extremely important attribute and it can be measured through a variety of metrics, including the company’s balance sheet, dividend history, and overall financial discipline. Peters explains,
“Durability implies an earnings stream that, if not quite predictable in any one year, can be relied upon over a series of years, during which short-term fluctuations should average out.”
One of the reasons that I launched my initial portfolio (in 2013) called the Durable Income Portfolio was because I wanted to provide REIT investors with a basket of the most reliable and predictable dividend growers.
By owning shares in the most durable REITs, investors can benefit from the combination of highly predictable income and steady price appreciation. Needless to say, the dividend growth component is the secret sauce, as explained again by Peters,
“Dividends represent a commitment by a company to its shareholders – a commitment that many of those shareholders are counting on for income.”
Source: Rhino Real Estate Advisors
Today I am writing about one of the top holdings within the Durable Income Portfolio and this company is being upgraded to a SWAN (sleep well at night). As I referenced in my newsletter (October edition),
“Just like inspecting a car, it’s my job to open up the hood of the REIT to determine if the vehicle is suitable for driving. I would not want you to get behind the wheel of a “lemon” that could become dangerous when you’re driving. So, just like a mechanic, I inspect the REIT in an effort to make sure the investment is as stress-free as possible.”
So, the SWAN label is nothing more than an inspection sticker that suggests that the underlying company is extra durable and can be relied upon such that the investor can sleep well at night.
“I want you to know that I take special pride in the SWAN ratings and when you see that listed beside the company, rest assured that I have taken considerable time to inspect the company, because we all know what happens when you are driving in a car when it runs out of gas.”