Valuentum Exclusive Analysis for the Discerning Investor

Symbol Keyword

May 13, 2020

Realty Income Signals Turbulence Ahead, Shores Up Liquidity Position
Image Source: Realty Income Corporation – First Quarter of 2020 Earnings IR Presentation. On May 4, the real estate investment trust (‘REIT’) Realty Income Corp posted first-quarter 2020 earnings that saw its adjusted funds from operations (‘AFFO’) per share jump by over 7% year-over-year, hitting $0.78 last quarter. Realty Income pays out a monthly dividend, and shares of O yield ~5.1% as of this writing. We like the REIT’s business model, which invests in single-tenant commercial properties, and view Realty Income as well-positioned to ride out the ongoing coronavirus (‘COVID-19’) pandemic. However, we caution that its near-term financial performance will come under fire from some of its tenants no longer being able to (or willing to) pay rent due in part to the economic downturn. As roughly half of its tenants carry investment-grade credit ratings, Realty Income is in a better position than some of its peers. Most of Realty Income’s tenants have continued to pay rent during the pandemic, at least during the early stages of the crisis, and the REIT is working with its troubled tenants to find a solution that suites the interests of both parties.

Apr 3, 2020

Dividend Increases/Decreases for the Week Ending April 3
Let's take a look at companies that raised/lowered their dividend this week.

Mar 26, 2020

Jobless Claims Spike; Restaurants, REITs In Trouble
Image: DOL. “The advance number of actual initial claims under state programs, unadjusted, totaled 2,898,450 in the week ending March 21, an increase of 2,647,034 (or 1,052.9 percent) from the previous week.” On March 26, the Department of Labor reported a surge in jobless claims for the week ending March 21 to 3.28 million, a number that “shatters the Great Recession peak of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982,” according to CNBC. The economic situation remains dire as the White House struggles to contain COVID-19 amid what could become one of the worst economic periods since the Great Depression, or one that can turn into the next Great Depression. We also address a couple questions from members regarding Cracker Barrel and the REITs, more generally. Our team is monitoring the stimulus bill in Congress, which just passed the Senate last night. We’ll have more to say about restaurants and REITs as our team pours over the bill and assesses long-run implications. We think this bear-market rally may be short-lived, as we don’t think we’ll see stabilization in the markets until about 6-9 months before a vaccine is widely available, and that may imply a market bottom that may still be 3-6 months ahead. Moral hazard continues to run rampant. The market is bouncing back on what looks to be expectations of an unlimited Fed/Treasury/Congress put, as well as new expectations for hyperinflationary pressures in the longer run in the midst of runaway government spending. Stocks are therefore in demand. We remain skeptical of the sustainability of this bounce, however.

Nov 8, 2016

Podcast: REITs, Interest Rates and Beyond!
The Valuentum analyst team talks REITs and the reasons why REIT investors should pay close attention to changes in Treasury rates. Various secular themes across the data center, healthcare, office, and mall REITs are discussed, and an explanation for the sector's systematically poor raw, unadjusted Dividend Cushion ratios is covered. ~8 mins.