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CBRE Clarion Global Real Estate Message Board

  • kinkaidonerd kinkaidonerd Dec 28, 2009 12:55 PM Flag

    DRP vs IGR

    Does anyone have any compelling reason why I should go with more IGR instead of something else similar like DRP?
    DRP sells at more of a discount, but the monthly payout rate is slightly less. Anybody have any insight?

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    • The yields are 8.45% for IGR, 6.6% for DRP and 5.6% for AWP so there is a significant advantage yield-wise for IGR. DRP and AWP both did pay out year end special dividends giving them higher yields but if you buy them now you just collect the monthly payouts which are lower. I think also it would suck if you owned DRP or AWP the last 4-5 months at prices higher or similar to today's prices, and then had to pay tax on a special dividend payout. REIT dividends are taxed at ordinary income, not at 15%. That forces you to pay a bunch of taxes on money you didn't earn.

      I think all are going to do well going forward as they are pretty similar, but i think the 8.45% yield on IGR is more of a magnet for fresh money than something yielding 6.6 or 5.6%. Especially at a time that investors are gobbling up shares of REITs with miniscule payouts. I'm amazed IGR isn't a lot higher already but now technically we are seeing signs that IGR is breaking out from it's base. It was only recently that IGR was trading at a 3-4% discount to NAV. No reason it can't close that gap to NAV significantly now. Only question is will NAV continue to climb or will it fall, closing the gap. NAV today is $7.53.

      • 1 Reply to fxdudeinmia
      • I'm holding in a Roth IRA, so the tax rates aren't an issue.

        I was more thinking of buying something else (DRP or AWP) as a way to hedge against mismanagement or something weird going on within one fund. They're all pretty stinking similar from what I can tell.

        I've had IGR since 2007, so my experience has made me a little fearful.

    • Also, AWP seems very similar to IGR.

 
IGR
8.55-0.06(-0.70%)May 22 4:02 PMEDT