Im new. My question is this: If a company only makes .86 cents per share,.....and pays out 1.70 in dividends a year....How long can that stay-in-place.?? How can a company Pay-Out so much $$, when their earnings are nowhere near the payout amounts.?? (Yeah, they might be able to Borrow some money to float the dividend for awhile,.... but that doesn't seem like a bright idea.)Would someone explan to me how HIW keeps paying out such a large dividend compared to their earnings.?? Thanks
Reit's have lots of real estate depreciation which is a non cash reduction of earnings per share. When the depreciation is added back to earnings it's called funds from operations or free cash flow. As long a free cash flow exceeds the dividend, which it does, the company can sustain the payout.