Filinvest REIT declares yet another dud dividend

Would you look at FILRT’s evaporating dividend

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)?

https://www.philstar.com/business/stock-commentary/2023/02/15/2245121/filinvest-reit-declares-yet-another-dud-dividend