REITs May Save $10 Billion With Stock Dividends; Strategy Spreads Across the Pond

by REIT Wrecks on January 31, 2009

We welcome prolific and urbane Zero Hedge to the REIT beat with their report on Simon Property Group’s (SPG) decision to join the list of REITs paying dividends in stock. The list continues to grow, seemingly limited only by the relatively lethargic schedule of dividends and earnings announcements. As Bloomberg reports in video below, cash savings for REITs may total up to $10 billion.

But investors won’t be so lucky. As usual, the only riskless constituency in this whole equation is Uncle Sam. Shareholders, who have been mercilessly pounded Justin Volpe’s billy club by falling share prices for months, will still be obligated to pay taxes on their slice of the cashless REIT dividend pie. If the video does not load, you can view it here.

Cash Saving Dividend Strategy Spreads Across the Pond

Meanwhile, On Wednesday, England’s Revenues & Customs department said it was evaluating a request from an un-named property company for permission to substitute cash dividends with shares.

If the alternative dividend policy is approved, it could enable U.K. REITs to follow their U.S. counterparts. U.S. shareholders will then be joined by their U.K. brethren in a fruitless search for cash who Madoff with it this time? to fund their tax obligations.

Click here for a list of REITs paying dividends in stock”.

REIT Stock Dividends

Disclosures: None at the time of publication
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