Citicore Energy REIT [CREIT 2.40 0.84%] https://www.philstar.com/business/stock-commentary/2022/07/22/2197227/citicore-energy-reit-declares-stable-q2-dividendthe country’s only interest-free REIT in the struggling commercial office space sector, declared a second-quarter dividend of P0.044/share, for shareholders of record as of August 19, payable September 14.
This dividend is identical to that declared by CREIT in the first quarter and, when annualized, represents a dividend yield of 7.33% at yesterday’s closing price of P2.40/share, and represents a good yield annualized (but somewhat lower) dividend of 6.9% vs. CREIT’s IPO price of P2.55/share.
This REIT has a few x factors.
The first is that it is completely unexposed to the continued weakness in commercial leasing space which could cast a negative light on all other PES REITs that are relying, to some extent, on strong demand. BPOs to support commercial office rental rates. .
CREIT’s quarterly dividends represent the “base” income it receives from leases for land used to generate solar power, and the value of the electricity produced has only increased due to a combination predictable and depressing power shortages and the tidal wave of inflation that pushed energy prices up.
This brings up the other x-factor, which is that the “baseline” quarterly dividends are only part of the overall picture of CREIT’s performance, as it will provide a special dividend at the end of the year from the other revenue stream it earns from revenue sharing agreements with power plants.
CREIT investors have not yet had a chance to see and feel the impact of this dividend, but projecting the potential size of this dividend is important to accurately projecting CREIT’s annual return.
With “high” and rising electricity spot prices, I think this signals a healthy special dividend Christmas present, but I haven’t had a chance to really dig in and build a model for myself. help predict the size/shape of this dividend.
Once I do, I’ll factor it into CREIT’s projected dividend yield. Until then, please note that my projections only include “base”/regular dividends. This is what long-term investing looks like: building increasingly complex models, with the goal of better predicting the value of something.
However, all models are inaccurate, so Sisyphus’ task is to continually retool and refactor to get as close as possible to the asymptote which is perfect accuracy. To some, that probably sounds bleak.
I love the challenge and the continuous learning that is required to do this!