Everyone loves payday. Just like everyone else, once I get that sweet deposit in the bank it starts burning a hole in my pocket. Before much time I am ready to blow it all on a shopping spree. My store of choice is the stock market, and I’m shopping for the best deals on companies. Here is what I dropped my $1,000 on this Friday, June 8th.
Government Properties Income Trust
The twelfth pick of the Let’s Be Millionaires investment series goes to the Government Properties Income Trust (GOV).
I am taking a bit of a turn this week and investing in a real estate investment trust, or REIT for short. REITs are a more accessible way for smaller investors like you and me to invest in large scale real estate ventures.
The Government Properties Income trust, as the name suggests, owns several properties that it leases out to government agencies. It turns out that government agencies don’t normally go out of business so they tend to be fairly reliable business tenants. You can view all of the properties that the trust owns under the properties tab of their website.
Check out The Government Properties Income Trust.
About The Stock
REIT stocks are typically high-dividend stocks and GOV is no exception. In fact, right now the dividend is at a ridiculously high 12.2%. That means that barring a catastrophe, my $1000 investment will be rewarded with $122 worth of dividend payments over the course of a year.
From 2010 all the way through 2014 GOV traded in a range between $21 and $26. In 2015 GOV stock entered a downtrend and dropped all the way to a low of $13 in January 2016. During 2016 the stock rallied back up to $24 a share and then back down to $18 and remained in that new range until 2018. GOV stock has fallen pretty sharply the first half of 2018 from $18 down to a low of $12 a share. The stock is now trading around $14 a share and I am hoping that we will see similar price action to 2016 with a rally up towards the $18-$20 range.
The stock currently has a P/E ratio of 90 which is quite high. Since the price of the stock has been falling recently and the P/E ratio has been increasing we know that earnings must have been coming in lower than expected during the past few quarters.
The company has a market cap of around 1.43 billion dollars. This stock would be considered a small-cap, domestic, dividend, real estate stock.
The speculation for GOV stock isn’t anything exciting. I’m really just speculating that the government will keep leasing office space and paying this REIT. I am also speculating that this low in the stock price is a great time to buy in. Only time will tell.
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