Savvy Trades and Investments

[researcher59]

SVC distribution is clearly safe, that's not the issue .... but by paying out more than net income book value declines steadily. And the market does care about book value. So book value (NAV) for SVC is down over 10% the past few years and so is the stock price. Total return is what counts, not just the distribution.

I've owned MPW in the past. It has a lower yield but is steadily increasing the distribution while SVC's has been flat for many years. MPW is also increasing its book value and the stock is up nearly 50% the past 5 years whereas SVC is losing book value and its stock price is down around 20% the past 5 years. So the total return on MPW has been much better than SVC despite the lower yield. FFO and yield are not the only important metrics.

EPS relative to REIT distribution does matter because it directly impacts NAV (book value) and that's something the market does care about. jmho