Lexington Realty just became the latest REIT to cut the common stock dividend. Yahoo! Finance It of course had to maintain its preferred stock dividends since it still plans to pay a common dividend. I have been looking at one of its preferred issues, LXPPRD, that is currently selling at around 7, with a $25 par value and a 7.55% coupon, currently yielding about 27% at that $7 price. LXPPRD Stock Quote - Lexington Rlty Tr Stock Quote - LXPPRD Quote - LXPPRD Stock Price It is cumulative. I realize the risk with these issues and do not expect all of them to work out. Nonetheless, the yields are tempting and I am attempting to evaluate them separately and on their on merits to improve my likelihood of avoiding too many blow ups. I have not decided yet on this one but 50 shares would be my limit for it.
Great Plains Energy (GXP), one of my positions, went ex dividend today and I am reinvesting dividends on that one. I also had a couple of Canadian Energy Trusts go ex dividend today, which pay monthly distributions and are recent adds, but have not yet been discussed, PWE and
AAV Stock Quote - Advantage Energy Income Fund Stock Quote - AAV Quote - AAV Stock Price I did discuss another one PVX and the same problems mentioned in that post are equally applicable to PWE and AAV. The later two have been impacted adversely by the fall in gas and oil prices, even with some collars in place. INZ AND PVX As mentioned in that post, these companies can pay high dividends because they do not have to pay Canadian taxes at the federal level and can thus distribute more income to shareholders, but this will cease in 2011 when Canada will start to tax them as regular corporations. The fall in energy prices is another negative issue. The fall in the Canadian dollar over the past several months, (see chart of FXC), results -in and of itself- in lower dividends to a U.S. holder and Canada taxes the distribution by requiring the company to withhold 15%. Some of the Canadian Energy Trusts have already lowered their dividends to reflect the fall in prices, including PVX and ERF. However, these stocks are starting to interest me after being smashed over the past several weeks. Last earnings report for PWE: Penn West announces its results for the third quarter ended September 30, 2008: Financial News - Yahoo! Finance
My max for AAV is 100 shares which I already have and 150 for PWE and I am at 70 so far. I do not intend to add to PWE for the remainder of the year or until I see some kind of stabilization to energy prices.