Hmm...I understand that a REIT returns at least 90% of its profit to shareholders in the form of dividends, but it can't pay a high dividend if it has no profit, right? 90% of nothing is still nothing. Right now I'm just looking at 2008, since that's the most recent year in which CIM recorded a net loss (of -119,809 according to its income statement), yet it still paid out high dividends for the year. I'm trying to understand how this is possible.
Does it pay out its dividends before computing its net income applicable to common shares? If so, where is it recorded on the income statement?
You are correct. They paid out more than the required amount as dividends. Indeed, it's not at all clear, despite what everyone says here, how they are can continue unless their investment environment improves or the dividend payments decrease. Everyone else, in my opinion, is blowing smoke...which is not to say that CIM may make up for a lagging quarter with a superior one, and I'm banking on that possibility because I think they are a great management company. Nevertheless, it is shameful that questions like yours are denigrated instead of answered.