Agreed. the whole thing is rather stinky. Best bet in my opinion is to hold a basket of telcos along with other goodies. FTR will find its level...
Frontier Communications (FTR: Nasdaq)
By Wells Fargo Securities ($5.08, Feb. 24, 2016)
We acknowledge Frontier Communications’ integration of Verizon Communications’ landlines might still be a “show me” story, but believe the 8%-plus dividend yield -- and after the transaction close should have the lowest payout ratio of the rural local exchange carrier group -- and accretive free-cash-flow profile present a compelling risk/reward.
Frontier (ticker: FTR ) remains our top large-cap rural local exchange carrier (RLEC) pick. Our estimated fiscal 2016 revenue and adjusted earnings per share are $5.4 billion and seven cents versus $5.54 billion and a loss of 10 cents prior, and we are introducing fiscal 2017 of $5.2 billion and five cents, respectively. [We readrate Frontier at Outperform.]
Nice to see people talking REITs. Some crazies on HCP Board. I am perplexed by the recent activity in REITs - it is just not rational behavior. O going to the moon while the rest of the space languishes; they have destroyed HCP, HCN and Ventas. Hold and Accumulate quietly - that's my plan.
Good to see someone else on the story! I am also a holder since 2005. I agree that there is a silver lining. Although I am not thrilled at the timing and severity of the cut, at least they are paying out income and not return of capital. Also, at April 30 (per today's press release) leverage stood at 12.31% These guys are smart. Why lever at record high prices.
When the market rolls over a bit, they can put on more leverage and possibly bring the distribution back and then some - such as specials. I hope the market recognizes this and does not punish AWF too severely. But I will miss the income loss!
I am surprised Management didn't telegraph this to the market better. Perhaps a series of smaller cuts.
The High Yield ETFs have seen distribution cuts for the past two years. Perhaps with a strong NAV of 15.25 the price doesn't drop too badly. I can live with $13.50 to $14.00 range which implies a 12% - 9% discount to NAV vs. current discount to NAV of 1.84%. On the other hand, if the market insists on a 8% for AWF then watch out below - that would equate to a $12.15 price based on new dist. of 97.2 cents per annum.
I am not sure which quarterly earnings you are referring to. Q4-13 was a blowout quarter. Given their leverage, I would expect very strong results in this low interest rate environment.
From ARCP's website:
For the quarter ended December 31, 2013 (as compared to the same quarterly period in 2012):
Increased revenues 213% to $94.1 million as compared to $30.1 million.
Improved AFFO available to common stockholders by 153% to $55.8 million.
Increased AFFO per diluted share by 108% to $0.25.
Generated proceeds of $690.0 million in convertible note offerings at an average cost of 3.4%.
Grew the monthly dividend in December to $0.94 per share coincident with the closing of CapLease, Inc. ("CapLease") and increased again to $1.00 per share upon the closing Cole.
Expanded credit facility borrowing capacity to $2.4 billion and further extending to $2.97 billion in the first quarter of 2014.
For the year ended December 31, 2013 (as compared to 2012):
Increased revenues over 260% to $240.5 million as compared to $66.8 million.
Improved AFFO available to common stockholders by 240% to $163.9 million.
Increased AFFO per diluted share by over 80% to $0.86.
Invested $3.4 billion in 676 acquired real estate properties.
Closed on (i) $2.3 billion acquisition of American Realty Capital Trust III, Inc. ("ARCT III"), (ii) $2.2 billion acquisition of CapLease and (iii) the $774.0 million acquisition of the GE/Trustreet portfolio, successfully integrating all acquisitions into the Company's property portfolio.
* Prefs trading well - vlose to 52 week highs.
Symbol Last Change Volume
ARCPP US $23.43 -0.19 (-0.80%) 647,169
* Bonds holding up well [spreads may even be tightening - so I hear].
* Pref & bond traders more of a mean/variance crowd. vs. retail whims.
Conclusion: Stock is getting beat up but prefs and bonds suggest that it may not be warranted; possible good entry / add to position - inflection point.
Yes - great yield. However, market is clearly not convinced on distribution sustainability or it would trade more like "O". We need a few solid quarters and accurate AFFO guidance. If we get that then I see no reason why we won’t see $16 - $18.
Agreed. Picked up a little more sub 14.
Does anyone know when it trades ex-spinoff?
ps. Glad some of the weirdos on the "O" board haven't found ARCP!
Funny Thing about the "noise" in the market... It is echoed by the idiots that seem to cling to this and many other Boards.
Our advice: Ignore the noise!!
O is a fantastic long-term value creator. We are sticking with O and buying on any further weakness.
We like 4 other names in addition to O; we call them the 5 Horsemen of REITs.
Good luck to all longs.
BUY the 5 horsemen:
Senseless beatdown is right...
AWF is one of the best managed CEFs in the land. While the recent $17+ was silly -- $13.92 is just right.
I will collect my 10 cents monthly and enjoy life. Thank you AWF!