2024-07-26 14:53:43 ET
Summary
- Blackstone Mortgage Trust cut its dividend by 24% last week, resulting in a 12% price slump.
- The REIT saw another decline in its performing loan percentage. Distributable earnings did not support the dividend (again).
- Shares trade at a large discount to book value.
- The best option for income investors is likely to hold here, given that the firm's distribution coverage should improve going forward.
As I suspected months ago, Blackstone Mortgage Trust, Inc. ( BXMT ) finally decided to cut its dividend amid continual problems in its loan portfolio. Blackstone Mortgage suffered a further decline in its performing loan percentage in the second quarter and chose to respond to the resulting deterioration of its portfolio quality by cutting its dividend by 24%. The move will save the company some cash, approximately $100M annually, and the distribution coverage metrics are set to improve as a result. Shares of Blackstone Mortgage continue to trade at a very large discount to book value which now seems more deserved given the dividend cut!...
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Blackstone Mortgage: 24% Dividend Cut, What Now?