A 7.7% Yield From Real Estate?

Be careful with this one...‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

SPONSORED Do NOT Flip Houses... Start Collecting Real Estate Income With as Little as $50 This is the easiest way to start collecting real estate income. You could be looking at thousands of dollars over time! Here's how. SAFETY NET Can This Mall Owner Maintain Its 7.7% Yield? Marc Lichtenfeld, Chief Income Strategist, The Oxford Club When mall owner Simon Property Group (NYSE: SPG) reports third quarter results in a few weeks, it will be perhaps the most important earnings report in its history. Brick-and-mortar retail has gotten crushed in 2020. While malls were already facing stiff competition from online competitors, the pandemic temporarily shut retailers' doors during the spring and many are still experiencing drastically reduced traffic. So shareholders will be watching Simon's earnings report closely to see whether its generous 7.7% dividend yield is sustainable. Now, keep in mind, the company already cut its quarterly dividend in 2020 from $2.10 per share to $1.30. The reduction tarnished a solid annual dividend-raising track record going back to 2010. But that all feels like ancient history. Can Simon Property Group maintain the $1.30 per share payout each quarter? Not surprisingly, funds from operations (FFO) - a measure of cash flow used by real estate investment trusts (REITs) like Simon Property Group - is expected to be down sharply this year, hitting its lowest level since 2012. Just prior to the pandemic, Simon Property Group's FFO dipped. SafetyNet Pro is not a fan of declining cash flow for any reason, so Simon Property Group's rating will be hit hard by the lower numbers in 2019 and 2020. What Is SafetyNet Pro? SafetyNet Pro is a groundbreaking tool that predicts dividend cuts with stunning accuracy. With it, you can determine the dividend safety rating of nearly 1,000 stocks. Access to SafetyNet Pro is reserved exclusively for subscribers of Marc's newsletter, The Oxford Income Letter.   The good news is that because the company slashed its dividend earlier this year, it is forecast to pay only $1.9 billion in dividends. So even if FFO comes in lower than the expected $2.98 billion, the company should be able to afford the dividend for the rest of the year. But what happens next year? SPONSORED Will This Ceramic Tile Transform Global Energy? The lead investor behind Google and Amazon is pouring millions into this technology. Get details on the IPO stock here. With Simon Property Group's declining FFO and a recent dividend cut, the quantitative model that runs SafetyNet Pro suggests another reduction in dividends in the next 12 months. Considering the state of brick-and-mortar retail, particularly in our big malls, I'd have to agree. We'll see whether the company reports anything to convince us otherwise when it releases its third quarter results on November 2. Dividend Safety Rating: F If you have a stock whose dividend safety you'd like me to analyze, leave the ticker symbol in the comments section. Good investing, Marc P.S. There's only one week until my Blockbuster Earnings Season Kickoff event, where I'll pull back the curtain on which companies I think will be this earnings season's biggest winners... And which companies, like Simon Property Group, are likely to disappoint. There's still space to register for the free event on October 21. Click here now. 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