$VER (a triple-net REIT) priced an upsized secondary of 60 million shares last week after a modestly disappointing earnings report.
That combo pushed the stock down to the bottom of the channel.
Peer companies are NNN& O, and both yield 3.55% compared to VER's 5.25%.
The secondary will accelerate the company's return to IG credit ratings, which is the
gating factor for dividend increases (which have been on hold at the current level since they were restored after an accounting scandal).
Given its lower DPS/FFOPS ratio compared to peers, when VER starts raising its dividend, they should be able to raise it faster than peers who have less room for increase with their higher payout ratios.
The current 170bp yield differential shoudl collapse.
For now, traders can play the channel.
That combo pushed the stock down to the bottom of the channel.
Peer companies are NNN& O, and both yield 3.55% compared to VER's 5.25%.
The secondary will accelerate the company's return to IG credit ratings, which is the
gating factor for dividend increases (which have been on hold at the current level since they were restored after an accounting scandal).
Given its lower DPS/FFOPS ratio compared to peers, when VER starts raising its dividend, they should be able to raise it faster than peers who have less room for increase with their higher payout ratios.
The current 170bp yield differential shoudl collapse.
For now, traders can play the channel.