Investors are always happy when a company they own increases its dividend. After all, as an income investor, you just received a raise.
But the hikes often mean more than just a company being generous. Dividend increases can also be an indication that the company feels its future earnings will be sufficient to cover the increase being given to its shareholders.
Wall Street analysts wield a lot of influence. A favorable or unfavorable mention of a stock by a well-known analyst or brokerage can move a stock up or down by several percentage points overnight. In the case of a downgrade or severe price target slash, it can take weeks or longer for a stock to recover.
The last 18 months have been rough for investors in real estate investment trusts (REITs). Excluding dividends, only 9 out of 187 REITs have been profitable over that time frame.
The great exodus from workplaces caused by the COVID-19 pandemic and the rising adoption of remote or hybrid work is claiming a victim in the market: commercial real estate.
It could be just the start of a prolonged sector turmoil.
When investors consider the purchase of a real estate investment trust (REIT), along with performance and dividends, they need to consider the properties and tenants that accompany that REIT. Several questions must be answered: Are the tenants long-term and stable? Are they strong enough to survive recessions and market downturns?