Should We Forgive This Dividend Achiever?

Its funds from operations slipped in 2020...‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ 

SPONSORED Big Tech's "Secret Savior" in 2021? The world's biggest tech companies are now pouring BILLIONS into the exciting space and satellite sectors... But one TINY company holds three massive advantages over the Big Boys... We think they'll soon be partnering up... And that puts it in a GREAT position for the biggest megatrend of the decade. Details here. SAFETY NET Will This Previously "A" Rated Stock Be Forgiven? Marc Lichtenfeld, Chief Income Strategist, The Oxford Club When analyzing the dividend safety data of Digital Realty Trust (NYSE: DLR), I was reminded of The Who's song "A Quick One, While He's Away." It tells the tale of a woman whose "man's been gone, for nigh on a year." The woman has a couple of indiscretions during that period, and when her partner returns, she confesses everything. While we never learn if they live happily ever after, the man does say repeatedly, "You are forgiven." Digital Realty investors, who have been used to nothing but stellar performance by the data warehouse real estate investment trust (REIT), got a bit of a shock last year. Funds from operations (FFO), the measure of cash flow used by REITs, fell for the first time in years. That is a sin that SafetyNet Pro has a tough time forgiving. 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.   Digital Realty has 280 data centers in more than 20 countries on every continent except for Antarctica. Its data warehouses host servers from many of the largest companies in the world, including AT&T (NYSE: T), IBM (NYSE: IBM) and Clear Channel. After several years of annual increases in FFO, Digital Realty saw a slight decline in 2020. We never want to see cash flow declining. It makes SafetyNet Pro nervous that the company may not be able to afford its dividend if that decrease continues. The fact that FFO is expected to increase significantly this year takes some of the pressure off. So does the fact that even in 2020, Digital Realty's payout ratio was below 100%, which means it created more FFO than it paid in dividends. SPONSORED Palm Beach Millionaire Reveals His Biggest Dividend Secrets He's Doing It Completely FREE OF CHARGE Right Here. Last year, Digital Realty paid 91% of its FFO in dividends. For REITs, as long as the payout ratio is below 100%, we're fine with it. And the fact that this year is expected to see a big increase in FFO makes us feel even better. Finally, the company has a stellar track record when it comes to its dividend. It has not only continued to pay the dividend without a cut but also raised the payout per share every year for 15 years. Digital Realty currently pays $1.12 per share quarterly for a 3.2% annual yield. Digital Realty has been rated "A" for dividend safety for a while. The 2020 dip in FFO caused some concern, but because of its strong track record and projected cash flow growth this year, like the protagonist in The Who's song, it is forgiven. Dividend Safety Rating: A If you have a stock whose dividend safety you'd like me to analyze, leave the ticker symbol in the comments. Good investing, Marc P.S. My book Get Rich with Dividends was recently ranked the No. 3 dividend investing book of ALL TIME by the website Financial Expert. I did a short interview with the publication after learning about the award. You can check it out here. Leave a Comment MORE FROM WEALTHY RETIREMENT The Road Ahead for Renewables This Company Is the Biggest Short in the Market The Can't-Miss Sector of 2021 Facebook Twitter Email Share SPONSORED Is THIS the Stock Market's Future During the Biden Presidency? 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