I always check this board looking for new ideas although I don’t post here often. Perhaps if we get in the habit of posting what REITS we are interested in or getting out of, that would start meaningful conversation that is useful.
To start, I’ll give an idea for comments and a question. I have owned BRT, an apartment REIT, for some time. I like the management, the business plan and long term growth and further potential. In short, they focus on growth areas of the country, buy apartment complexes that are a little tired or rundown. Fix them up and improve the cash flows. Eventually they tend to sell a portion of their portfolio when fully utilized, rinse and repeat.
Roughly 4% dividend today which they increase over time.
Now for the question. They have had a pretty rapid (for them) increase in price over the last few days. Up more than 5% yesterday alone. Nothing in the news on the company that I can see at all. I like it, just wondering if the overall apartment industry is reacting similarly, anybody else seeing apartment REITS going up?
Just trying to understand the recent price action… but if you are looking for a decent place to park your cash, you may want to look at BRT.
Looking at the chart, it seems to have gone up along with APTS—which I have held for years but sold yesterday. APTS is being bought out and some may have bought BRT not knowing the full story and simply thought that type of REIT was “hot”??
I may look into BRT—if it comes back down.
Thanks Chuck. That does look like the Catalyst. Not sure if it is mistaken identity as much as good pin action as Cramer would say.
The thought being, If apartment REITS are getting bought out by Blackstone, there is good value there and may be more buyouts.
In any case, it sure looks like the cause of the stock price movement over the last few days.
Congratulations on your BRT investment. Today, though, it looks pricey with a forward P/FFO ratio of almost 23, and a dividend yield of only 2.7%.
But many REITs are like that today. For example, ROIC (an old TMF Income Investor and Inside Value recommendation) has a forward P/FFO of 19 and a dividend yield of only 2.8% (based on the increased annual dividend of $0.52 announced yesterday).
There are some decent REIT values out there. But you have to search. (And TMF has a pretty good and relatively new premium service that researches and recommends real estate stocks, including REITs: the Millionacres Real Estate Winners service. It’s inexpensive and I signed up about a year ago. Disclosure–I don’t work for them. And I already own many of their recommendations which I invested in before they did. Ha!)
Long ROIC since 2010
Hi David, I think you have some numbers mixed up. Last quarter they raised the quarterly dividend from $0.22 to $0.23. That works out to about 1% /qtr. depending on the price you use, that is about 3.8% which is pretty decent these days. Also I don’t have future FFO but the adjusted FFO last quarter was $0.31 and earnings were $1.54 due to property sales.
Anyway. The price is clearly not as good as it was but I do think the company is pretty good and is cheaper than your post makes it look.
A growing company with a roughly 4% dividend is not easy to find!
Oops, I goofed on the dividend yield which, as you say Randy, is around 3.9% based on Friday’s closing stock price. Sorry about that.