Use access key #2 to skip to page content.

toopersent (22.67)

Did I just miss the boat?

Recs

2

August 05, 2009 – Comments (1) | RELATED TICKERS: HRP , ARE

So, being the responsibly diversified investor that my pappy taught me to be, I have some money in an REIT.  Great news for me considering the recent run up in the REIT sector.  I own 500 shares of HRP that I purchased at $4.42/share.  Their dividend is decent, but I'm kind of sketched about their portfolio of commercial real estate.

I really really really like ARE, though their dividen yield isn't as high, I was thinking about dumping HRP and buying some AREEP (preferred stock) which has a better dividend yield of 10%.  I'm bullish on biotech and they are the leading health industry REIT.

Given the current run up of ARE, did I miss the boat on this trade or what?  With a current P/E of 14, It seems relatively cheap compared to its historical P/E in the 30's.  Should I pull the trigger on common stocks, preferred stocks, or just hold tight with HRP? 

1 Comments – Post Your Own

#1) On August 05, 2009 at 7:27 PM, x1x2x3x4444 (< 20) wrote:

I have no idea what you should do because I don't know you, your risk tolerance, age, income, assets, etc.

 But, I can see HRP is up about $1 from where you bought it and it's current dividend is still above 9%. The extra 1 percent you'd get if you sold HRP and bought AREEP would amount to about.... $22 a year. Taking into account transaction costs, etc., you'd probably have to hold the stock for a year just to break even - and then another six months to make enough to pay the commission if you want to sell AREEP. That's 18 months to, essentially, break even on the yield.

Of course, if you think one or the other stock has a better chance of capital appreciation - i.e. it's stock might go up - you need to factor that in. Not having a crystal ball, I leave that up to you.

 

 

Report this comment

Featured Broker Partners