SLRC - 12% To 18% Dividend Yields In Danger

2024-01-24 19:10:33 ET

Summary

• Several high yielders are in danger.
• Some dividends are at risk. For others, it is primarily valuation.
• Why is taking gains so unpopular?

Comparing REITs Poorly

Imagine two real estate investment trusts or REITs:

1. Both have $2.00 per share of interest income per share.
2. Both have $.10 per share of overhead expenses.
3. One has $1.00 per share of net interest expense (leaving $.90).
4. The other has $0.10 per share of net interest expense (leaving $1.80).

Is the one with twice as much interest income per share twice as good?

Maybe, maybe not. You don't actually have the relevant information to make that decision. The pieces of data I provided are vastly inadequate to answer the question....

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