Adding a REIT to 20 Stock Portfolio
In 2007 REIT stocks overall had a total negative return of -14%. This comes after 7 straight years of positive returns. I believe fears of an overall slow down in the U.S. economy, plus the credit crunch, plus the low level yields on REITs had reached, combined to scare investors away from this segment.
I decided to add a stock from this category primarily from reading “T” at his blog Investing From the Right. T is a long term investor with many years experience investing in stocks and real estate, and I think he provide some excellent information on his blog. He has written about Monmouth Real Estate Investment Corp (MNRTA: 8.09 0.00 0.00%) on several occasions, most recently this week. I decided now was a good time to add a REIT to my 20 Stock Portfolio, so I took a look at MNRTA and think it has excellent prospects.
Monmouth has a current dividend yield of 7.5%, has a market cap of $190 million. The company portfolio is a well diversified group of industrial properties in 26 states. Here is an excerpt from the most recent annual report:
– On July 31, 2007, the Company completed the strategic combination with Monmouth Capital Corporation, increasing the size of the portfolio by fourteen properties. The combination also significantly increased the capital of the Company.
– In August 2007, the Company successfully completed the disposition of a vacant property, resulting in the realization of a $4.6 million gain on the sale of that property. In accordance with the Company’s definition of FFO, none of this gain has been included in FFO. Additionally, this sale eliminates approximately $500,000 in annual expenses related to this property which had been vacant since December 2006.
– During 2007, the Company was successful in renewing expiring leases.The Company was also successful in leasing a property that had been vacant. Of our approximate 6.0 million square feet of gross leasable area, 98% is now occupied.
– The Company continued its program of acquiring industrial properties subject to triple net leases to investment-grade tenants for its portfolio by acquiring three new properties in fiscal 2007.
And a quote from the Eugene W. Landy, President:
“These recent favorable developments, coupled with our strong balance sheet, provide for a strong outlook for fiscal 2008, our 41st year of operation.”
So, with a thanks for the head’s up to “T” I am adding (MNRTA: 8.09 0.00 0.00%) to this site’s 20 Stock Portfolio.
Now that is an entertaining chart!
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