it is not so common to see a channel as well-defined as this one.
Of course, right now the stock is not near the lower end of the channel.
Here's why this REIT is in an uptrend:
New CEO (March 2015) is getting to the end of an asset sale program that is designed to reduce leverage so that the company regains investment-grade credit ratings. The completion of that program, expected this year, puts the company in a position to begin raising its dividend and using FCF to acquire prperty and grow.
VER's dividend yield of 5.0% (at $11) is materially higher than that of peers O (3.4%) and NNN (3.4%) which both enjoy higher credit ratings of Baa1/BBB+.
VER's attraction relative to those peers is that it currently has a lower payout ratio relative to AFFO. This means that once dividend increases begin, it should be able to grow the dividend at a faster rate than its competitors as it normalizes its payout ratio. Since a higher dividend growth rate should lead to a lower comparative dividend yield, other things being equal, VER's yield should continue to compress relative to those of NNN and O.
Warning: Because REITs are very interest rate-sensitive, if the market comes to expect rising interest rates, that yield compression might happen via a share price declining less rapidly than that of peers.
Of course, right now the stock is not near the lower end of the channel.
Here's why this REIT is in an uptrend:
New CEO (March 2015) is getting to the end of an asset sale program that is designed to reduce leverage so that the company regains investment-grade credit ratings. The completion of that program, expected this year, puts the company in a position to begin raising its dividend and using FCF to acquire prperty and grow.
VER's dividend yield of 5.0% (at $11) is materially higher than that of peers O (3.4%) and NNN (3.4%) which both enjoy higher credit ratings of Baa1/BBB+.
VER's attraction relative to those peers is that it currently has a lower payout ratio relative to AFFO. This means that once dividend increases begin, it should be able to grow the dividend at a faster rate than its competitors as it normalizes its payout ratio. Since a higher dividend growth rate should lead to a lower comparative dividend yield, other things being equal, VER's yield should continue to compress relative to those of NNN and O.
Warning: Because REITs are very interest rate-sensitive, if the market comes to expect rising interest rates, that yield compression might happen via a share price declining less rapidly than that of peers.