Can Arbor Realty's 42% Price MoJo Continue In 2019?
This week I'm seeking a prestigious and long-term dividend-paying stock from the real estate business sector.
That real estate sector includes nine industries all related to real property ownership. The industries are: general real estate; Real estate services; and seven varieties of real estate investment trusts: diversified, healthcare facilities, hotel & motel, industrial, office, residential, and retail.
Today I'm reviewing a small-cap real estate investment trust - diversified, named Arbor Realty Trust Inc. Its trading ticker symbol is ABR.
Arbor Realty Trust Inc is a real estate specialty finance firm.
It invests in a diversified portfolio of structured finance assets in the multi-family and commercial real estate markets.
It also invests in real estate-related bridge and mezzanine loans.
It operates in two segments, Structured Business and Agency Business.
The company qualifies as a real estate investment trust for federal income tax purposes.
It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders.
The company was founded in 2003 and is headquartered in Uniondale, New York.
I use three key data points to gauge the value of any dividend equity or fund like Arbor Realty Trust Inc.:
(1) Price
(2) Dividends
(3) Returns
Besides those three, four more keys will finally unlock an equity or fund in which to invest.
But those first three primary keys, best tell whether a company has made, is making, and will make money.
ABR Price
Arbor's price per share was $11.75 at Friday's market close. A year ago its price was $8.26 for a price increase of $3.49 per share for the year, that's 42% upside!
Assuming Arbor's price will trade in the range of $7 to $17 next year, Arbor's recent $11.75 price could improve by $5.00 to $16.75 by late-October, 2019.
ABR Dividends
Arbor's most recent quarterly dividend was $0.25 declared August 3rd and paid August 31st.
At this most recent $0.25 quarterly rate, Acme's annual dividend equals $1.00 yielding 8.5% at yesterday's closing $11.75 price.
Gains For ABR?
Adding the $1.00 estimated annual dividend to my estimated $5.00 annual price upside for Arbor Realty Trust Inc. makes a $6.00 potential gross annual per share gain, which will be reduced by any costs to trade the shares.
A little under $1,000.00 invested today at the $11.75 recent price buys 85 Arbor Realty Trust Inc. shares.
A $10 broker fee paid half at purchase and half at sale costs $0.12 per share
Subtracting that $0.12 brokerage cost from the estimated $6.00 gross annual gain leaves a net gain of $5,88 X 85 shares
= $499.80
or nearly a 50% net gain on a $998.75 investment.
Therefore, Arbor Realty Trust Inc. whose trading ticker symbol is ABR now shows a possible nearly 50% net gain including an 8.5% dividend yield.
Six brokers cover this stock:
One says "buy" ABR.
One says ABR will "outperform" it peers.
Three say "hold" the stock.
One thinks ABR will "underperform" the peer marketplace
In those six opinions, the general recommendation number comes up as 2.67 or "hold".
These six wizards of Wall Street also reckon a price target $0.20 lower than the current market price or $5.320 lower than my calculated upside estimate.
So, you could look at these speculative numbers this way, Arbor Realty Trust Inc. whose trading ticker symbol is ABR, has made money, is making money, and could net a 10 % to 50% net annual gain including an 8.5% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to determine if Arbor Realty Trust Inc. is worth your time and money.
Disclaimer:
This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...
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