High-Yield REITs to Avoid: DDR Corp (DDR)
DDR Corp (NYSE:DDR) is another open air shopping center REIT that, along with the typical troubles of brick and mortar retail, also has a few other problems to add to it.
First, its management team keeps changing. A new one just took the helm in late July. The problem with continual changes in management is there is no long-term expectation and, in the short term, tactics vary. This can be a convenient cover for a struggling company seeking the image of a competent company while simply kicking the can down the road.
Second, its core tenants — TJX Companies Inc (NYSE:TJX), Wal-Mart Stores Inc (NYSE:WMT) and PetSmart, Inc. (NASDAQ:PETM) — are focused on a price-sensitive consumer who isn’t really back in the spending game. And WMT is in the process of closing stores, rather than opening them.
Third, almost 15% of DDR net operating income comes from the beleaguered economy of Puerto Rico. Some point to its 7.6% dividend as a lure, but that pales in comparison to the 34% loss the stock has posted so far this year. And there’s still at least as much downside to upside here.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.