RE:RE:RE:RE:RE:RE:FYI TheCapitalist wrote: Johnny41 wrote: Im just tired of reading that because the shares are so low and this has pushed the distribution so high that it means its going to cut... Its Toronto properties alone are worth more than the entire corporation is trading at... Im surprised someone hasn't taken them out.
When yields get over 5%, it typically means that the company is in trouble. Even if it isn't given most people ASSUME that it indicates problems, companies will usually cut to what investors expect is a "healthy" yield.
That being said, Dream Office has consistently paid a high yield for years without cutting it, so the notion that +5% yield signals problems is obviously not accurate with them.
I can agree with you that it is anxiety provoking to consistently hear articles touting the idea that a cut in imminent. There's a lot of fear out there. I've been sh*ting my pants leading up to the Q4, probably for no legitimate reason.
5% yield is irrelevant when every REIT is trading at 70% to BV or lower. The past 6 months have led to sell off after sell off.
First it was Dec 2014 "Holy cr@p OPEC will not cut, and we are sub $70!!1!" sell off that created lower lows
REIT specific: The supposed glut of office space in TO & Calgary coming in 2017
Then the Canadian economy went into recession cause of low oil
Followed by the fear of the US rate hike
QE3 ended
Then the Aug 24 crash happened
Then the Fed hiked (big deal)
Then we started the year with "China's growth concerns"
Next we had WTI crude falling sub $30
& last but not least the media paraded out that we are in a bear market.
Do not confuse stock market prices for fear and un rational behaviour. Every REIT has sold off far more then they should have. The sell offs have not been related to AFFO payout ratio problems, they are related to panic that the world is falling apart. Maybe we are slowing down in growth but hey REIT's are REIT's. Keep cashing cheques, send me some dividends.