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Strategies & Market Trends : Dividend Investing -- Ignore unavailable to you. Want to Upgrade?

To: sea_biscuit who wrote (117)	8/9/2001 11:13:26 PM
From: Paul Senior	Read Replies (1) \| Respond to of 387

Well, if most of the return is from reinvesting dividends as you say, then reinvesting at today's 5.5% creates a gap from the total return of 17.4%. This would have to be made up by either increasing the dividend or by increases in stock price. But it's not like real estate or REITs are undiscovered by the market at this point. There's plenty of discussion that if we are in a recession or heading there, that demand for industrial/office real estate might be affected negatively too. WRE now, compared to its past few years, sells at a relatively high price/book and at a fair or average p/sales. That's imo. I notice that debt has gone from 28M in '95 to over 351M now, and profit margins are high but slipping. I don't have the FFO numbers. I just wonder how easy or difficult it will be to jump up that dividend amount from this point forward to keep the overall growth at 17.4%. I'm not intending to argue with you that the 17.4% rate is or is not sustainable. I see real estate as cyclical and geographically specific. I also see a good argument for WRE which is, "Forget cycles. Over 30 years WRE overcomes or overcame all those cycles - if they even existed for WRE." And past performance is often a very good indicator of future performance. I am offering this post only to back up my statement that I'm not sure the 17+% rate is sustainable. If you say it's sustainable, okay. As a holder of several REITs (but not WRE), I hope real estate continues to do well. WRE too.