FBRT - Franklin BSP Realty: 10.8% Dividend Yield But Coverage Slipped
2024-02-19 12:59:00 ET
Summary
- Franklin BSP Realty has dropped to trade at an 18% discount to its book value per share of $15.77 at the end of its fiscal 2023 fourth quarter.
- The company currently offers a 10.8% dividend yield that is 110% covered by distributable EPS.
- Credit quality remains healthy with six assets placed on watchlist during the fourth quarter.
Franklin BSP Realty ( FBRT ) like other mortgage REITs has been fighting the Fed for the last two years with a $5 billion commercial real estate loan portfolio spread across 144 loans as of the end of its recently reported fiscal 2023 fourth quarter. This portfolio is heavy on multifamily loans with a 77% allocation but is diversified across office, hospitality, and industrial properties amongst other property collateral. CRE angst describes deep market fears around a tripartite of headwinds currently faced by US commercial real estate. From the Fed's own battle with inflation pushing base interest rates to a more than two-decade high of 5.25% to 5.50%, rising office vacancies from working-from-home, and a seesaw economic backdrop. I last covered the ticker in the summer of 2022 with a broadly neutral outlook....
Franklin BSP Realty: 10.8% Dividend Yield But Coverage Slipped