Oct. 31 at 5:05 PM
$RC There is no such thing for a REIT as "at this price". REITs - being value stocks, not growth stocks - are valued depending on the dividend they pay. If their business is deemed stable and profitable enough to cover their dividend, the market likes them. An example is Rithm Capital, whose earnings per share cover by far the dividend payments. That's where Ready Capital could have been (at around
$11 a share) if its business had been as stable and profitable as the Rithm Capital's one instead of being as disastrous as it is.
The worst thing that could happen to a REIT is to make the market doubt about the sustainability of its dividend. That's a red line not to cross or have red as the predominant color of the share price performance. That's what Ready Capital has done: made the market doubtful. Therefore, its share price will not find a bottom until it can reassure investors that: i) its business itself has found the bottom; and ii) is steadily recovering.
