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Retail Opportunity Investments Corp. Message Board

  • amerlafrance amerlafrance Feb 23, 2012 5:48 AM Flag

    good results

    Good results and nice projections for 12. I was disappointed in the dividend, but maybe spoiled by last year and not too surprising it was maintained at same rate because with added shares out this is an increase in total dividends being paid by the company. Looking forward to the CC

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    • For some reason, I had a nice post typed up yesterday and Yahoo wouldn't let me submit. My point was that even though we're looking at FFO x payout ratio as an average, we need to think about it more from a linear stand point. On a mid-point basis, they've guided to $0.73 x 75% or ~$0.55 for the full year. We know they've issued $0.12 in Q1. That leaves, $0.43 for Qs 2-4, or $0.14 on average. But they aren't likely going to pay an average...they will more likely increase the dividend in step fashion as leasing and acquisitions ramp. So, it could look like $.13, .14 and .16 cents for Q's 2-4. Or maybe $.12, .15, .15.

    • For some reason, I had a nice post typed up yesterday and Yahoo wouldn't let me submit. My point was that even though we're looking at FFO x payout ratio as an average, we need to think about it more from a linear stand point. On a mid-point basis, they've guided to $0.73 x 75% or ~$0.55 for the full year. We know they've issued $0.12 in Q1. That leaves, $0.43 for Qs 2-4, or $0.14 on average. But they aren't likely going to pay an average...they will more likely increase the dividend in step fashion as leasing and acquisitions ramp. So, it could look like $.13, .14 and .16 cents for Q's 2-4. Or maybe $.12, .15, .15.

      Now, investors are most likely going to look at dividend yield on a run-rate basis. They are going to take last Q, and if it is deemed sustainable, multiply it times 4 to look at forward yield. If we end at $0.15, investors will annualize that to $0.60. Slapping a 4% yield on that puts the share price at $15. If we end Q4 with $0.16, a 4% yield puts shares at $16. A 1 cent hike translates to a $1 increase in share price at a 4% dividend yield valuation. KIM currently trades at a 4.1% yield.

      Who knows if the market will continue to assign such low dividend yields/high multiples to REITs. The Fed's current zero interest rate policy bolsters the case, but one can never tell. In the meantime, that's the math.

    • The 2012 projections are not very good.

      • 2 Replies to bamajoe20715
      • I disagree. The projections are good, just not great, and not what has been the recent history at ROIC. I think that a near 40-50% divy hike for upcoming year is positive. This is a result of getting bigger and, I think, the reduction of fire-sale/very cheap properties available which they can buy and turn around. As mentioned in the call, some that they have turned around, they might sell off because the additional improvement going forward is not sufficient for their capital - rather sell and redeploy on another asset turnaround.

    • One small issue is the slowdown in acquisition during the qtr. Looks like they have addressed that by announcing deals in the current quarter.

      As said elsewhere, the dividend raise is slowing. Divy in 2010, 0.18/sh, in 2011, 0.39/sh, now projected to go to 0.55/sh (based on midpoint of FFO and midpoint of payout target (75%). This is 41% growth. Slower growth but if stock stays stuck at 12, yield increases to 4.6% from current 3.2% yield. If folks are happy with stock at 3.2% yield, stock should rise to ~ $16.9/sh over the next year.

      Let's see what discussion there is on the warrants - this is a long awaited topic that keeps getting pushed out into the future. I noted that interest expense whacked the net income/FFO for 4Q. They ended qtr without borrowings but plan to resume borrowing for current qtr purchases.

      Look forward to CC.

    • Solid results.......stuart tanz is executing his business plan and 2012 looks like it will be another good year.

 
ROIC
16.75+0.05(+0.30%)Feb 27 4:00 PMEST

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