Judy Alster, Senior Analyst, 21st Century Investor

New Position: REIT Glimcher Had a Bright Q2 with Bad News Already Announced

New Position.  We'll be carefully adding real estate investment trusts to the Dividend Portfolio starting with Glimcher Realty Trust (NYSE: GRT) who sticks to retail, dealing in regional and super-regional malls and community shopping centers in 15 states. Glimcher actually turned a profit in the second quarter; its net income available to common shareholders (REITs use somewhat different measures of profitability from "regular" companies) was $1.3 million or three cents a share, up from a loss of $5.3 million or 14 cents in the quarter last year; funds from operations, or FFO, were $20.5 million, up 28% on total revenues that increased over 8%. Other bright spots were a gain from an asset sale, better recovery rates, higher fee income and slightly higher rents -- not a bad showing in a bleak economy. These were offset by slightly lower occupancy rates and a tenant bankruptcy.

We always like to see bad news in the rear view mirror, and Glimcher has already lowered its quarterly dividend significantly, from 48 cents to 32 cents. Another such item was the announcement last week of a $400 million mixed shelf offering, that is, the periodic sale of up to $400 million in stock and various debt securities, with the size and price to be determined at the time of sale. This often comes with REIT territory, but the announcement had no effect on the stock. Glimcher has lowered its full-year earnings expectations two cents, which also had no lasting effect. At 1.27, its price-to-sales ratio is low for the industry. The company's annual yield at today's share price of $10.48 is 12.2%. The Dividend Portfolio is taking a 100-share position.

Links

21st Century Investor Portfolio #1

21st Century Investor Mid-Cap Value Portfolio

21st Century Investor Dividend Portfolio

21st Century Investor Trends Portfolio

21st Century Investor Web Site