The High Yield Of The Preferred Stock Of Modiv Industrial Comes With Some Risk
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Modiv Industrial's preferred stock offers a high yield with a wide margin of safety, but its high debt load poses risks during economic downturns. The REIT's FFO per share is expected to return to pre-pandemic levels, supporting the preferred dividend's safety. However, the high payout ratio and weak balance sheet threaten the common dividend.

December 20, 2024 | 1:00 pm
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Modiv Industrial's preferred stock offers a high yield, but the company's high debt load makes it vulnerable to economic downturns. While FFO per share is expected to recover, supporting the preferred dividend, the common dividend is at risk due to a high payout ratio and weak balance sheet.
The article highlights the high yield of Modiv Industrial's preferred stock, which is attractive to investors. However, the company's high debt load and weak balance sheet increase the risk of dividend cuts during economic downturns. The expected recovery of FFO per share supports the preferred dividend, but the common dividend remains at risk, leading to a negative short-term impact on the stock price.
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