The Safest Dividend Is The One That’s Just Been Raised

 In Free Articles

Summary

  • TRTX has been a great pick and I am so glad that I took the time to include this new REIT in our research.
  • While dividend growth is not expected for most commercial mortgage REITs, LADR and TRTX have demonstrated their worth by providing investors with sizable boosts of confidence.
  • TRTX is a solid commercial mortgage REIT and I like the simplicity of the platform.

It’s been over five months since my initial update on commercial mortgage REIT, TPG RE Finance Trust, Inc. (TRTX). As you may recall, I wrote shares in this company on January 22nd in which I explained,

“I really like TRTX because (1) the business model is simple, underwriting senior secured loans, (2) the loan portfolio is ultra-safe (weighted average LTV of 59.2%and weighted average credit spread for the loan portfolio was LIBOR plus 4.8%,)(3) the external management team is experienced, with two execs previously at LADR, and (4) the dividend yield is 8% and growing…”

In case you forget, TRTX was boasting a dividend payout of $.38 per share in my previous article, and in March the company announced it was increasing it to $.42 per share (payable on April 25th). This is a 10.5% increase from the prior dividend, and of course this is what prompted me to use the Josh Peters inspired quote for this article,

“The Safest Dividend Is The One That’s Just Been Raised”.

Now keep in mind, there are quite a few other things that I like about TRTX and the purpose for this article is to open up the hood again and determine how the company performed in Q1-18. In addition, I need to evaluate this commercial mortgage REIT alongside the closest peers in an effort to determine whether or not I will maintain my current BUY recommendation.

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As you can see (above), TRTX has been a great pick and I am so glad that I took the time to include this new REIT in our research. While many of our traditional equity REITs have lagged YTD, TRTX and Ladder Commercial (NYSE:LADR) have proven to be excellent names to own.

While dividend growth is not expected for most commercial mortgage REITs, LADR and TRTX have demonstrated their worth by providing investors with sizable boosts of confidence. It should be no surprise that a company’s price performance is oftentimes directly correlated to dividend growth.

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