Filinvest REIT declares yet another dud dividend
Filinvest REIT [FILRT 5.80 1.1%] [link] declared a Q4/22 dividend of P0.071, payable on Mar 24 to shareholders of record as of Mar 3.
The Q4 dividend is 19% smaller than FILRT’s Q3 dividend, and reduced FILRT’s annualized yield from 6.07% to 4.9% based on FILRT’s closing price from yesterday.
Relative to FILRT's IPO price, the dividend increased FILRT's total stock and dividend return to -7.16%, up from its pre-dividend total return of -8.17%.
MB BOTTOM-LINE
At this point, I’m just not sure what the market is waiting for from FILRT.
Based on its terrible Q2/22 dividend, it’s equally terrible Q3/22 dividend, and this absolutely atrocious Q4/22 dividend, I’d expect the annualized yield to be in the low 8% range to (1) place FILRT’s valuation in-line with its commercial REIT peers, and (2) reflect the degrading nature of FILRT’s dividend.
That would imply a FILRT stock price of around P3.50/share, which is 40% lower than yesterday’s closing price of P5.80/share.
I don’t say this to pick on FILRT. The valuation the market has placed on FILRT simply stands out to me based on every available metric that I have access to.
If you had to put a chunk of money into a REIT and leave it there for a year, would you rather receive a 4.9% return by owning FILRT, or a 5.5% return by owning AREIT [AREIT 35.35 0.1%]?
What if you had to leave it there for 5-10 years?
Would you look at FILRT’s evaporating dividend, or would you put your money in the REIT that has increased or maintained its dividend every quarter since its IPO in 2020?
I don’t say this as a sales pitch for AREIT, either.
It’s just a great example of the kind of comparison that makes FILRT’s current price so confusing to me.
Under what condition would a fixed-income investor select FILRT, either in the short term or the long term, over many of its peers, or even alternative REITs like Citicore Energy REIT [CREIT 2.47 0.4%] (power generation with higher yield) or VistaREIT [VREIT 1.70 unch] (retail with much higher yield)?
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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