VER - VEREIT's Dividend Reset Is a Big Letdown
There's no way to sugarcoat what happened to VEREIT's (NYSE: VER) dividend -- the net-lease real estate investment trust (REIT) trimmed it by a painful 45%. That was not what investors had been expecting when the year began, but COVID-19 upended the company's plans. That said, there's still a lot to like about the REIT, even if future dividend growth is really just a matter of making up lost ground. Here's a look at what happened, and why investors might still want to give management the benefit of the doubt.
VEREIT was born from the ashes of American Realty Capital Properties. When still known as American Realty Capital, the company's leadership focused on growth at any cost, with an emphasis on acquisitions. The pace of expansion was so fast and furious, and the desire to please Wall Street's growth expectations so strong, that the finance department pushed the accounting envelope a bit too far. The ensuing scandal led to the suspension of the dividend and the ouster of the company's top leadership. Its stock plummeted.
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