I attended an engaging presentation by OUE Commercial Reit CEO, Ms Tan Shu Lin, yesterday. It was nicely done with a good balance between subjective and objective analysis.
Here is one of their slides:
Wow. Impressive. Their dividend distribution is increasing every year, they must be making more money every year…….
……..or is it?
The above chart is correct, but it gives a wrong picture to us investors. The correct unit to use on the Y-axis should not be Distribution, but Distribution per share. This will then take into account share dilution due to right issues or other corporate actions.
The chart with Distribution per share will look at this :
Not too bad. It looks stable, but not as impressive as the previous chart.
My favorite web site to measure DPU performance is http://app.yieldsavvy.com, which displays per quarter rather than per year.
Year on year…..falling. Quarter on quarter……..falling. Sigh. Dividend yield of 6.38% for this counter is too low for me. Not enough margin of safety if DPU were to continue to drop.
I prefer REITS with rising DPU. I have given many examples of REITS with rising DPU in previous posts. Check them out!
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