GMRE / Global Medical REIT: Revisiting Dividend Assumption After Q2 Results

Global Medical REIT Inc. has seen a decline in its fixed charge coverage and funds from operations due to interest rate hikes. The preferreds are of c more_horizontal

REITs face structural headwinds from higher costs of financing, which is a critical constituency in the process of how REITs create a value. If the in more_horizontal

REITs are crashing hard right now. That's despite posting good quarterly results. We highlight two opportunities to buy the dip. more_horizontal

Higher interest rates have made many dividend paying stocks and equity-type instruments less attractive compared to risk-free rate alternatives. In th more_horizontal

Global Medical REIT Inc.'s strategy focuses on investing in small to mid-sized healthcare facilities in secondary markets, offering higher returns wit more_horizontal

Before Q2 2023 results, I changed the rating to hold for GMRE due to an increased probability of dividend cut. The key drivers of such assumption were more_horizontal

Global Medical REIT only has 6.4% upside to its NAV estimate of $10.96 based on a 7% cap rate. There is not enough upside to warrant initiating a new more_horizontal

Q2-2023 showed a small decline in FFO even though revenues went up. Payout ratio is right near 100% and growth should be hard to come by. We tell you more_horizontal