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Anthracite Capital, Inc. Message Board

  • af_matt af_matt Sep 15, 2001 1:42 AM Flag

    Re: COOLREIT, on being worried

    To be considered a REIT AHR is required to pay 95% of it�s earnings. No more, no less. That�s the beauty of the stock. You can sit on a 11-12% div. and watch the earnings slowly rise. Possibly you should consider a riskier growth stock.

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    • I believe you are using old information and an incorrect intrepretion of that requirement.

      REITs must pay out 90% (not 95%) of their taxable earnings, not GAAP net income. Most, if nor all REITs will pay out at least 100% of their taxable earnings to avoid paying income taxes. Their is also no prohibition against paying out more than 100% of taxable earnings as a return of capital.

      As to the payout, it is based on the taxable year, not each quarters results. So AHR could have earned less than $.32 and maintained the same dividend in anticipation of making up the difference in the next quarter. I'm certainly not suggesting such is the case, but simply it could a possibility. Until the third quarter earnings are announced in November, the GAAP net income won't be known, never mind their taxable income. Making any assumptions, pro or con, is likely just speculation.


    • Right On!

      Was waiting for someone to respond with facts like you did re dividend. I would advise some of todays posters concerned with no div. icrease to sell because they obviously don't understand what they own.