Shareholders are currently paid a handsome dividend for holding shares of BX. The current yield-to-price is still an impressive 8.77% based on the closing price of $19.15. My concern is this yield represents a payout ratio of over 300%!
Maybe that's based on all the new rent money that will be flowing in during 2013. But it takes time to buy existing houses, prepare them for occupancy and then put them on the market as rentals. When the three million houses are rented and the cash flow starts coming in, the upside on BX should be pretty!
In the meantime, if you own shares, one way you can protect yourself is by using a "stealth" trailing stop-loss system like
to which I subscribe.
It sends subscribers a timely alert when shares have dropped to your pre-determined stop-loss levels without the market makers being able to see where you intend to sell.
These are exciting times for real estate-related investing. Those who bought shares of BX on the way up should be encouraged. For those who didn't, patience and a reasonable 5% to 10% price correction will open the gate for a more opportunistic buying opportunity. The same can be said for WY.
At the time of publication the author had no position in any of the stocks mentioned.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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