Author Topic: Thoughts on dollar cost averaging into MO - 6.6% yield or Vanguard REIT  (Read 805 times)

FrugalSaver

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I am very well diversified and looking to add some investments into MO or a vanguard REIT.

MO is near 5 year plus lows (the 12/24/18 crash notwithstanding which lasted for about 3 weeks).

MO has a history of raising its dividend.

One vanguard REIT i looked at only yielded around 3.42% and was at all time highs.

I already do all the standard 3 fund portfolio allocation so this would be in addition to rental properties and 401k and 3 fund portfolio investing, etc

J Boogie

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I would create your own index fund of REITs if you are interested in diversified income investing.

Index funds are great for equities, but there are excellent opportunities to invest in mid cap REITs that are far from fully valued - while certain popular REITs get overvalued frequently such as O.

Some of these are too high to buy right now, but here are some of the REITs I own:

BPR
DEA
CCI
AIV
CIO
CONE
GMRE
VER

Then there are others such as WPC that are overvalued but I will be purchasing on a dip.

Once some of your in-scope REITs reach a fair to cheap valuation, (you can use price to NAV, see how well the dividend is covered, history of dividend growth, etc - it's not too hard to determine), you buy.

And then you just buy more on the dips.

Brad Thomas has good analyses but I avoid certain industries like lodging and retail that are especially susceptible to cyclical and secular trends respectively. I never buy something because "aw, it's not THAT bad" because you're essentially trying to call the bottom. IE Tanger outlets, which Brad gets a lot of crap for his bullishness on.

Greenback Reproduction Specialist

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I was thinking that same thing as you, however what I found is that the fundamentals of the company currently are beginning to trend in the other direction. The company might course correct, but I'm not willing to risk it. Next run up in the stock and I'm out.

Take a look at the 30yr financials
-Revenue is basically leveled out, but has fallen by about half of what it was in 2004.
-Debt per share has doubled since last year, I'm guessing this has something to do with the purchase of juul.
-Earnings per share is all over the place since 2004.
-Free cashflow per share is flat
-Book value is about half of its 2004 value.
-I think the real kicker though is that the enterprise value has been in decline since 2017... Why? I'm not sure.

Non of these add up to a safe dividend stock for me, to much risk. You want to see what a rock solid 30yr charts on fundamentals with good div history looks like? Check out JPM or HMC or AAPL