Filinvest REIT [FILRT 5.80 1.1%] [link] declared a Q4/22 dividend of P0.071, payable on Mar 24 to shareholders of record as of Mar 3.
The Q4 dividend is 19% smaller than FILRT’s Q3 dividend, and reduced FILRT’s annualized yield from 6.07% to 4.9% based on FILRT’s closing price from yesterday.
Relative to FILRT's IPO price, the dividend increased FILRT's total stock and dividend return to -7.16%, up from its pre-dividend total return of -8.17%.
MB BOTTOM-LINE
At this point, I’m just not sure what the market is waiting for from FILRT.
Based on its terrible Q2/22 dividend, it’s equally terrible Q3/22 dividend, and this absolutely atrocious Q4/22 dividend, I’d expect the annualized yield to be in the low 8% range to (1) place FILRT’s valuation in-line with its commercial REIT peers, and (2) reflect the degrading nature of FILRT’s dividend.
That would imply a FILRT stock price of around P3.50/share, which is 40% lower than yesterday’s closing price of P5.80/share.
I don’t say this to pick on FILRT. The valuation the market has placed on FILRT simply stands out to me based on every available metric that I have access to.
If you had to put a chunk of money into a REIT and leave it there for a year, would you rather receive a 4.9% return by owning FILRT, or a 5.5% return by owning AREIT [AREIT 35.35 0.1%]?
What if you had to leave it there for 5-10 years?
Would you look at FILRT’s evaporating dividend, or would you put your money in the REIT that has increased or maintained its dividend every quarter since its IPO in 2020?
I don’t say this as a sales pitch for AREIT, either.
It’s just a great example of the kind of comparison that makes FILRT’s current price so confusing to me.
Under what condition would a fixed-income investor select FILRT, either in the short term or the long term, over many of its peers, or even alternative REITs like Citicore Energy REIT [CREIT 2.47 0.4%] (power generation with higher yield) or VistaREIT [VREIT 1.70 unch] (retail with much higher yield)?
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