I have a large position about 8% in KMI that I picked up at $32 and am trying to sell half at around $45. I personally like KMI because its fairly stable and growing income and because it was a GP which was more levered to KMP. However, if you want more yield why not sell some and buy ETP. I have owned them in the past and they are essentially in the same business. I only wish ETE was a c corp or that they had a LNCO type equivalent so I could hold it in a Roth.
They should build communications infrastructure without the legacy pensions that the other communications infrastructure companies have. This would allow for better services at lower prices due to newer technology.
If...and I realize its an if for now. But if WTI stabilized at $65/barrel what do you believe LINE/LNCO would do about their dividend. Would they keep it constant or will they raise it and if so by how much? I realize that no one knows...but I asking in order to get a better sense of how they will behave with regard to their debt. I can't tell if management has decided to pay down more debt or not. As a long I'd like to see them pay down debt and I believe a higher coverage ratio would would actually help the stock price more than a higher dividend.
Any insights are appreciated.
Any opinions in BX? I got a little burned back in 2010 and should have held on but I like the company. My only complaint is that it feels like a bit of a black box as in its hard for an outsider to keep track of moving parts. Also, I'm not sure if management views their dividend as long term sustainable or as we are minting cash right now so we'll distribute some of what we have.
I also own a small position in SSW. Do you have any insight into if they will buy out The Carlyle Group's share of GCI? Would you hold if they do or would you view The Carlyle Group selling as a negative?
Also if you like SSW you may also like TGH. They should do better as rates increase.
Congrats on the dividend raise.
I have to respectfully disagree. With REITs its all about AFFO, interest rate coverage, cash rent increases, tenant concentration risk, and dividend/(A)FFO. And this is specifically because only a few questions matter. What do I get paid to own the REIT, how will that pay increase, and how safe is that payment.
However even with a C-corp I would focus on cash flow. For example with a drug company they have invested millions into drug development over several years and the costs need to be recovered with each pill sold. However once the original investment has been recovered its like 99% profit. Looking at cash flow you see what the company is truly bringing in each quarter as opposed to earnings which reflect the upfront costs.
My belief is this. Earnings are for the IRS, cash flow is for the investor. But that just my opinion.
A couple questions for you...I'm asking so please take it as genuine questions.
1) If the tenants are mostly cyclical isn't that a good thing given that the economy is strengthening...however slow it may be.
2) If we were headed for a recession wouldn't you rather own a warehouse than a lot of retail stores? Its rather easy to go through a store rationalization process and close unprofitable stores but companies tend to have fewer warehouses which are configured to their needs and it would take a lot of cash to move to another warehouse and set up there. Plus I would assume it would disrupt the business during the move.
3) I believe the per share metrics were a little funky for 2014 due to raising capital in issuing shares in October 2014 for deals that ended up being pushed to 2015. While this isn't ideal they did address the issue and in a deal based environment things are going to happen on occasion.
4) STAG raised dividends 10% last year. Due to the over-ATM issuance they had a tighter FFO/share coverage than usual. I believe that they are expecting acquisitions this year to make up for that. And I would expect that they won't grow the dividend nearly as much this year...but I'm sure it will grow. And I think that is a key difference between STAG and many non-mReit high dividend REITs. For example there are several REITS yielding 7% - 9% that haven't raised their dividends in years. But STAG is and that is one reason...the pie is growing.
Again...I appreciate your thoughts.
I think it has to do with the growth rate and tenancy to do significant ATM offerings and that a June hike is not necessarily off the table. But the business is solid. I'm in at $24.50 and would by more around $20.70. Check out the SFL board for a discussion I started there. But my points are similar to yours.
I wouldn't try and convince you or anyone to buy the stock...but here are a few facts that may interest you.
1) The company is expects to grow 25% per year through acquisitions. Those acquisitions will presumably be at higher cap rates as interest rates increase. Current cap rates at 6.6% and the highest in the industrial space except for FR. REXR is 6.0% and PLD is just over 4.0%.
2) Current interest rate coverage is 5.0X.
3) Occupancy is 95% and retention is 70% demonstrating that vacated buildings are easily re-leased.
4) Debt is 37% of real estate cost but only 28% of enterprise value.
5) No tenant accounts for more than 2.3% of ABR
6) AFFO multiple is lowest amongst its peers at 17.3X. PLD is over 25X while REXR is at about 20X.
So other than ATM offerings due to acquisitions I would expect this share price to be higher...in the meantime the high and growing dividends should suffice.
Did anyone see STAG (the stock as opposed to Stagg the farmer) today? I own a small position at $24.50 and would double that at $20.70. Its currently yielding 6% which I believe is due to the Fed not ruling out June for a rate increase.
I favor STAG over traditional retail centric REITS because the momentum of the shift from bricks and mortar to retail is still gaining momentum every year. In addition STAG is growing quite aggressively and if rates rise their newer acquisitions will have higher cap rates and since leases are generally shorter an improving economy will provide opportunity to raise rent commensurate with increases in interest.
Please let me know your thoughts. But at this point I'd be willing to make take it from ~2.5% - 5.0% of my portfolio.
Doesn't Congress have to approve this deal? If so what makes you think they are going to do so?
I could see the Republicans using approval of the deal as leverage against Obama for something like cuts to social programs and increases in defense spending but I don't see Obama playing along. If so, what will make Republican's pass this deal? I think they've already proven that they don't care much for Obama or for their international reputations.
I'm not saying the Republican's would be right or wrong, good or bad, just that I'd don't see them following Obama's lead. Even if they did want the deal, I could see key players in the party stepping in to try and get more thereby scuttling the deal.
Has anyone considered taking a small position in an inverse bond etf like TBX sometime this summer? It seems like a good hedge against short term declines in dividend paying stocks and reits which are expected to take a big hit. I was considering only about 1-2% of my portfolio.
Thanks to everyone...after considering all the angles I decided not to invest in Monsanto.
While the use of chemicals is not always ideal in many situations their products help produce higher yields however those higher yields come with the added risk that include risk of cancer for the workers. I think there are likely other avenues to play the agg space down the line like FPI or Land.
So instead of Monsanto I ended up buying some FDX. I expect them to grow at a faster rate than the economy due to the Amazon effect. This also fits with my investment in STAG.
Why doesn't Linn take the opportunity to make some cash by issuing additional Linn units and buying back LNCO shares at a 14% profit. They could either use the profits towards debt management or buy back additional shares of LNCO and reducing the dividend. Either way it helps the company and makes shareholders happy.
Does anyone have any insight into Monsanto. I've been evaluating it for a small position but with the carcinogenic news today, I'm not sure how this will play out. I would assume that we need Mon's seeds in order to feed the world however I would think that with China trying to steal their seeds and create a competitor that they could loose market share over seas. Any thoughts?
On the other hand I do own KSU and believe this is a buying opportunity. They'll have great growth over the next several years with additional auto plants and with the expansion of their ports. They also own an interest in the railroad running along the Panama Canal so they have a lot of growth drivers.
That and the deal with bank...i.e. leniency on the principal payments will help out as well.
However, I had ready...not sure where...that rates were basically being renegotiated to a point of being near break even for SDRL. If that is true...and I wouldn't testify that it is...but if it is then the forward ROA, ROE, and ROI would be adjusted way down.
Given that many of SDRL's contracts are being renegotiated has anyone considered if the contracts between SFL & SDRL are renegotiable or if SFL would be willing to make concessions as was done with FRO?
Also, we saw with FRO that JF setup Frontline 2012 to profit from the demise. Does anyone see him or Helmen Holdings either stepping in to buy the future building contracts or paying off some of the debt in exchange for a larger stake in the company?
If they were able to reduce present & future debt by 50% I'd think that the stock would rise creating value for all players.