Dividend Stocks

This 7% Yield Is About to Get Safer

Brookfield Property Partners (Nasdaq: BPY) is a partnership under the giant Brookfield umbrella. Brookfield has several publicly traded subsidiaries. The parent company is involved with private equity, infrastructure, real estate and power.

Brookfield Property Partners owns 96 million square feet of office space and 120 million square feet of retail space, and it has 11 million square feet of office and multifamily projects in development.

Last year, the company reported funds from operations (FFO) per share of $1.48. FFO is similar to cash flow, and it is the metric used by real estate companies.

Brookfield Property Partners paid out $1.26 per share in distributions in 2018. (Partnerships pay distributions rather than dividends.)

So last year, Brookfield Property Partners easily afforded its distribution payment.

This year, FFO per share is expected to decline to $1.44. However, in 2020, that figure is projected to rise to $1.58.

Even at $1.44, the company can afford its distribution, and if it meets estimates in 2020, the declining FFO per share this year will be all but forgotten.

Brookfield Property Partners has raised its dividend every year since it began paying one in 2013.

Like a college kid with a gambling problem, Brookfield Property Partners knows that having a parent with deep pockets doesn’t hurt.

If the partnership ever needs to raise money in order to pay the distribution or fund new income-producing investments, it likely will be able to using the Brookfield name.

According to SafetyNet Pro, the only thing against Brookfield Property Partners is this year’s slight decline in FFO.

But if next year FFO is still expected to grow, the stock will achieve the highest rating available, which is impressive for a 7% yield.

In the meantime, the stock is considered low-risk for a dividend cut.

Dividend Safety Rating: B

Grade Guide

If you have a stock whose dividend safety you’d like me to analyze, leave the ticker symbol in the comments section.

Good investing,

Marc


About

A master of the steady, reliable science of income investing, Marc’s commentary has appeared in The Wall Street Journal, Barron’s and U.S. News & World Report. He has also appeared on CNBC, Fox Business and Yahoo Finance. His book Get Rich With Dividends: A Proven System for Double-Digit Returns achieved best-seller status shortly after its release in 2012. He captures the hearts and minds of readers approaching their golden years in his daily e-letter, Wealthy Retirement.

 

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