What Did You Buy Today?

[Otter]

(01-17-2019, 12:23 PM)fenders53 Wrote: I am trying to understand them more thoroughly.  As I am sure you are aware, it's a completely different game.  You can;t evaluate them like a DGI stock, or even an ordinary growth stock.  Many classifications of REITs are required to distribute 90% of profits by law.  That is why the Divs are crazy good.  EPS doesn't really matter much as long as they can pay the dividend and operating expenses.  If they want to truly grow they leverage.  The quality REITs are well managed and know what they can get by with in a downturn.  The true gambles over-leveraged and offer an insane dividend you'll surely give back in share price if you are caught holding in a real estate downturn.  I am looking for higher div REITs that maintained a somewhat stable SP.  I'll share my high div port when it's close to assembled.  It won't be a large percentage of my port for sure.  The great REITs you can buy and forget "like O" are clearly overvalued now.  That buying opportunity will come with patience.

Traditional REITs I can handle pretty well. Am happily invested in FRT, O, NNN, WPC, BPY, and SKT (roughly ordered as I see it from most reliable to most risky when it comes to long-term dividend safety). It's the mREITs that give me heartburn. STWD has a particularly convoluted and complicated business model that relies on a varied stream of lending activities and buying/selling commercial paper and mortgage-backed securities. I tried wading through an entire SeekingAlpha deep-dive on them at one point, and it was pure gibberish as far as I could discern. Bought them on a whim with a small stake several years ago when it was selling for $18 and change, and sporting a 12% yield, and sold out about a year ago when I decided that businesses I couldn't understand weren't for me, and that focusing on quality in the portfolio was a better move than playing with high yield.

UNIT was a bit different. I happened across a Law360 article about the Aurelius/Windstream (WIN) lawsuit, and took a look at the pleadings. Aurelius claims looked pretty weak (to me), so I took a position in UNIT (spun off from WIN, and largely reliant on WIN for revenue from a lease agreement). Enjoyed the double-digit yields for a while, and the volatile price action was fun, but I eventually sold that position as well. Same quality vs. gambling decision. 

At this point, SQ is my only straight-up gamble that doesn't pay me quarterly to wait.