CREIT Q1 dividend 6.8% fatter
Citicore Energy REIT [CREIT 2.52 0.4%; 181% avgVol] [link] declared a Q1/23 dividend of P0.047, payable on July 6 to shareholders of record as of June 9.
The dividend has an annualized yield of 7.46% based on the previous closing price, which is 6.8% larger than CREIT's pre-dividend annualized yield of 6.98%. The total amount of the dividend is P308 million, which is 106% of the P290 million in distributable income that CREIT reported for the quarter.
Relative to CREIT's IPO price, the dividend increased CREIT's total stock and dividend return to 9.22%, up from its pre-dividend total return of 7.37%. CREIT said that revenue from new leases signed to two projects in development helped boost its guaranteed lease income for the quarter.
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The total amount of distributable income for the quarter was roughly in-line with previous quarters, so it’s not clear the basis that CREIT used to declare this fatter dividend.
REITs are allowed to declare dividends that exceed the amount of per-share distributable income available from that quarter, the only limit being the sustainability of that kind of approach given the REIT’s forward-looking prospects, or other factors like retained earnings that have not yet been distributed to shareholders through dividends.
Here, I’d say it’s probably a combination of both: with CREIT benefitting from increased income from a few new leases, and retained earnings of over P410 million at the end of 2022, CREIT had the juice and (maybe?) the confidence to declare a dividend in excess of its distributable income. Shareholders have reason to smile today.
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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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