When a stock's yield climbs above 10%, it's usually a sign that investors think the company's dividend is unsustainable. However, occasionally, an ultra-high dividend yield highlights that the market severely misunderstands a company. Investors have driven this REIT's dividend yield to an incredibly high level out of fear that FFO will continue declining. Here's what Mr. Market is missing...
Pennsylvania Real Estate Investment Trust (NYSE:PEI) looks like a prime example of the latter phenomenon. The stock has lost half of its value since last spring -- and three-quarters of its value since the fall of 2016 -- but investors are misinterpreting a plunge in the REIT's funds from operations (FFO). With FFO likely to return to growth in 2020, PREIT stock could regain much of the ground it has lost.
Source: Motley Fool
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