ABR - Arbor Realty Trust: Buy And Hold This 13.4% Dividend Yield

2024-05-11 12:34:25 ET

Summary

• Arbor Realty offers a substantial and well-covered 13.4% dividend yield and is trading at a low multiple to distributable earnings.
• The mREIT's dividend yield is close to its highest point in a decade adjusting out the pandemic, rendering it an attractive investment opportunity.
• Arbor Realty's strong liquidity position is north of $1 billion with the mREIT covering its dividend with distributable earnings by 109%.

Arbor Realty ( ABR ) is one of my largest REIT positions. This has come on the back of its substantial and well-covered dividend yield and near-record low multiple to distributable earnings. The internally managed multifamily lender last declared a quarterly cash dividend of $0.43 per share , kept unchanged sequentially and $1.72 per share annualized for a 13.4% dividend yield. This was 109% covered by distributable earnings of $97 million, around $0.47 per share. The continued safety of the dividend yield forms the basis of my continued investment in ABR as the Fed looks set to follow its European peers in cutting rates this summer and against the continued highly opinionated and sometimes fictional short reporting that's ramped short-term volatility in the mREIT's common shares. ...

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