8% dividend yields are not in short supply, the problem is that their stocks don't move, the question is why? And if you get this right than concept of PEG comes into play.. if a equity employs its earnings at higher rate than what is available to investors post dividend than lower dividend yields are far better.. however dividend plays are down hard and are looking to stop paying dividends so as to get some attraction in the market..
great story for all those dividend yield nuts..
CRESCENT: Trust aims to buoy shares
By Norma Cohen, Property Correspondent
Crescent Real Estate, the once high-flying US real estate investment trust backed by billionaire financier Richard Rainwater, has considered cutting its dividend and using the proceeds to buy back stock in an effort to bolster its flagging share price.
The move comes as Crescent restructures leases at its Charter behavioural healthcare facilities, whose income accounts for about 15 per cent of its dividend.
The poor performance of the REIT sector generally, and of Crescent in particular, is a reflection of shareholders' growing view that in a mature phase of the real estate cycle, managements whose main ability is to spot under-priced assets are worth much less than a team capable of developing an operating strategy for those assets.
"Two years ago, people felt real estate companies had good growth possibilities in a consolidating industry," said John Lutzius, analyst at Green Street Advisors, a California-based real estate securities research firm.
"But the bargains had already been wrung out of the market," he said, adding that a focused operating strategy is now more highly rated than the ability to acquire diverse assets cheaply.
Crescent's other assets include an office portfolio and a string of refrigerated warehouses.
Although the entire sector has been shunned by investors over the past two years, Crescent's shares have recently fared worse than most, closing on Friday below $16 per share against a net asset value per share of $22 to $26, according to analysts' estimates.
Crescent's senior management was understood to have aired its plans with industry analysts at a recent trade association meeting, who informed it the move would be ill-advised.
Crescent, which is due to report third-quarter results this week, is said to have all but abandoned the idea. "It said that while it remains a theoretical option, it values its relationship with the Street and will act accordingly," said an analyst.
The move would have been an unprecedented step for a REIT, a sector selected by investors primarily because of its high dividend yield of around 8 per cent, and one from which analysts believe the company would unlikely ever to recover the confidence of investors.
"It is something only a REIT in trouble would do," Mr Lutzius said, adding that it would raise questions about whether Crescent was able to cover its dividend.
Should the company decide to cut its dividend, it would be "perhaps not impossible but certainly unprecedented" for Crescent to enjoy the benefits of being a publicly-traded company, said David Sherman, REIT analyst at Salomon Smith Barney.
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