Buffett’s REIT capital store (WKN: A12CRU) has announced that it will once again pay investors a quarterly dividend of $0.385. The ex-dividend date is the last trading day of March. This, in turn, means that spontaneous investors would have to secure the shares by then if they still want to take the distribution with them.
However, we can say that the dividend has not changed at the moment. This is Store Capital’s third dividend payment of $0.385 to investors. However, there is one change that you should definitely be aware of: the price you pay today is quite different. This also means that the bottom line is that you can get more for your money.
Store Capital: price change, not dividend
As we can see by looking at the Store Capital share price, there has been quite a bit of volatility. Just from the last quarterly dividend to this one, the share price fell from just over €30 to €26.51. This means that we now get a possible discount of around 12%, which is not a small thing. but there is more
Store Capital was still trading at a share price of more than EUR 35.80 in February 2020. This means that the possible discount is around a quarter since then. This is certainly not insignificant and has led to a completely new valuation situation.
With a dividend of $0.385, Buffett REIT is currently paying its investors a dividend yield of 5.28%. This is certainly a significantly higher value than the previously achievable 4.x% or sometimes a little less than the 4% we had at the top.
Especially since the Store Capital dividend has recently changed. Not every trimester. But in the fall of last year, management increased the pay per share from $0.36 to $0.385. With moderate growth, this down payment is definitely attractive.
Also rated cheaper otherwise!
However, Store Capital’s valuation is not just cheaper in terms of dividends and dividend yield. No, other fundamental indicators also suggest this conclusion. Management expects funds from operations per share of at least $2.18 in the current fiscal year 2022. With a US dollar share price of $29.07, the price/FFO ratio would be around 13.3, which could mean solid overall performance. Especially since the payout rate of 70.6% would be very sustainable based on this value.
But Store Capital also boasts solid earnings over time. So there are changes in many areas, but not now this quarter with the dividend. But the share price, which has become significantly cheaper in the meantime.
The Store Capital article: The dividend does not change, the price does! first appeared in The Motley Fool Germany.
Vincent owns shares of Store Capital. The Motley Fool recommends Store Capital.
Motley Fool Germany 2022