VistaREIT declares chunky Q4 div

VistaREIT [VREIT 1.74, up 0.6%; 0% avgVol] [link] declared a Q4/23 dividend of P0.0538/share, payable on May 28 to shareholders of record as of May 7. The dividend has an annualized yield of 12.37% based on the previous closing price, which is much larger than VREIT's pre-dividend annualized yield of 9.2%. The total amount of the dividend is P404 million, which is 74% of the P546 million in distributable income that VREIT reported for the quarter in its dividend disclosure. Relative to VREIT's IPO price, the dividend increased VREIT's total stock and dividend return to 15.62%, up from its pre-dividend total return of 12.55%. The Q4 dividend is 34.5% larger than VREIT’s Q3 dividend. Cumulatively, VREIT will distribute 88.2% of its FY23 distributable income through its four FY23 dividends.

MB bottom-line: Surprise! What’s even more surprising is that (according to my records) the size of this dividend was insufficient to drag VREIT across the 90% threshold of dividends relative to distributable income as required by the REIT Law. All of the Q1 through Q3 data I’ve taken directly from the Quarterly Reports for the distributable income, but perhaps the amount recorded on VREIT’s dividend declaration is a little bit understated and the discrepancy will be resolved by the release of VREIT’s Annual Report. Either way, I’d love to hear more from VREIT about whether this is some kind of one-off windfall or something that investors could reasonably expect to continue going forward. VREIT’s price would have to rise to around P2.34/share (a 34% increase from its current market rate) to bring the stock back closer to its previous 9.2% annualized yield. I’m not saying that’s what should happen, just what would need to happen if this Q4 dividend represents some New Normal and not just a Christmas treat.

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