I see this stock is heading down again. A stock that gives a 10% dividend yield and is managed to increase this dividend with inflation, in theory sounds like a great invetment. Is the market disagreeing? Are investors doubting the ability of Carey to deliver on their goals? I would appreciate any feedback on this issue.
Several years ago we were involved in an LP such as CDC, before its conversion to a stock fund, which was converted to a stock fund. Upon the conversion, the dividends were cut, the stock price dropped as has CDC and the value of investment went from $16 to $8 with the did cut to 1/4 of what it was. Hope this does not happen again.
Pruman98 ... I certainly agree with your observation .. and have been tempted to dump CDC. But I am inhibited by thinking back to my reassons for buying it: Basically, my thought was that this would be a well-managed, quite conservative portion of my portfolio which would generate a high yield and have the promise of modest incremental growth in that dividend over time. I've seen nothing to negate that thinking.
But I'm more than a little distressed by Mr. Market. I think that you have to ask yourself whether the (I hope) temporary diminution in the market price is a problem for you. It certainly is ... if you bought for capital growth; but it's not ... if you bought for income.
That's a long way of saying, I guess, "It looks as though the business is intact. It's simply not popular!"
Think both your comments are valid.. It seems as though CDC has the capability to grow, but instead provides a good return. We have long since decided to hang in there for the returns and keep other investments for growth. When the stock gets down to what we paid and the dividends decrease, then we will get rid of it even at a loss. This happened on another real estate investment we made some years back. Seems as though you can't have the best of both worlds..growth and dividends.