NAV is important, but the div is the next catalyst
Opinion: Look for a .01 div increase this year. 20% chance in the 2nd Q, 80% chance in the 3rd Q, virtual certainty in the 4th Q. When it happens, look for an advancement toward the $5's.
From the annual report:
In addition, a sizable number of REITs announced reductions in their common share dividends and a somewhat smaller number of REITs suspended their preferred share dividends. The reduction in the Fund’s leverage and the reduction and/or suspension of dividends by certain REITs in the Fund’s portfolio resulted in a reduction in the level of income earned and anticipated to be earned by the Fund. Consequently, the Fund’s monthly distributions were reduced effective in January 2009 and again in July 2009.
Robert Conti President and CEO
NOW HERE IS WHAT THE GUYS WHO ACTUALLY MANAGE THE MONEY HAVE TO SAY:
In conclusion, we would like to address the outlook for REIT dividends. During the credit crisis, as REITs looked to conserve capital, many elected to lower or cut their dividends or pay a portion of their dividends in stock.We believe this cycle has largely ended and we expect to see a return to more stable income levels for REITs going forward, with a shift back to all-cash dividends. Additionally, we believe there is the potential for rising dividend levels down the road should we see further improvements on the economic front.
Steve S. Shigekawa and Brian Jones Portfolio Co-Managers