W. P. Carey Slashes Dividend by 20%, Betraying Income Investors Who Valued Its Payouts

W. P. Carey is ending its 24-year dividend growth streak and cutting its dividend by ~20%, betraying income investors who valued its dependable payouts.
The cut is likely due to WPC struggling to lease its office properties, prompting it to spin off its office assets. But its rationale for slashing the dividend is unconvincing.
Statistically, dividend cutters like WPC strongly underperform dividend growers over time, producing dismal returns for shareholders.
WPC's claims that it will now trade at a higher multiple without offices and grow faster are dubious based on comparisons to peers.
Income investors should sell WPC due to the dividend cut and broken trust, and buy better high-yield aristocrats like SCHD, BTI, JNJ or MSFT instead.

seekingalpha.com

Relevant topic timeline:

8/23/2023

W. P. Carey Stock: Has The Market Lost Its Mind? No, The Market Is Right (NYSE:WPC)

The recent collapse in W. P. Carey Inc. (NYSE:WPC) stock has led to a downward de-rating due to concerns about the company's growth prospects, debt maturity profile, and rising yields, although it may present an attractive entry level for investors.

9/21/2023

W.P. Carey Exiting Office Sector, Spinning Off and Selling Office Properties into New REIT

Real estate investment trust (REIT) W.P. Carey plans to exit the office sector by selling over half of its office properties and spinning off the rest into a separate publicly traded REIT, in a move aimed at improving its growth profile and capital costs amid declining office occupancy rates.

9/21/2023

W.P. Carey Exits Office Properties as Remote Work Reduces Demand

Real estate investor W.P. Carey is exiting the office real estate market due to decreased demand caused by the rise in remote work during the pandemic, with plans to spin off some properties and sell the rest to lower costs and create long-term value for shareholders.

9/21/2023

W.P. Carey Sells Office Assets, Reduces Debt and Dividend to Refocus on Faster-Growing Industrial Properties

Real estate investment trust W. P. Carey Inc. plans to spin-off its office properties and "reset" the dividend to a lower level, damaging its dividend growth track record but still offering a attractive dividend yield and potential for improved growth in the future.

9/25/2023

W.P. Carey's New Strategic Plan Draws Criticism for Dividend Cut, High Costs

W.P. Carey's plan to spin off its office properties into a new REIT, Net Lease Office Properties (NLOP), and cut its dividend is a shortsighted and unnecessary move that will result in value destruction for shareholders.

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Posted 9/26/2023, 11:00:00 AM

W. P. Carey Slashes Dividend by 20%, Betraying Income Investors Who Valued Its Payouts

W. P. Carey is ending its 24-year dividend growth streak and cutting its dividend by ~20%, betraying income investors who valued its dependable payouts.
The cut is likely due to WPC struggling to lease its office properties, prompting it to spin off its office assets. But its rationale for slashing the dividend is unconvincing.
Statistically, dividend cutters like WPC strongly underperform dividend growers over time, producing dismal returns for shareholders.
WPC's claims that it will now trade at a higher multiple without offices and grow faster are dubious based on comparisons to peers.
Income investors should sell WPC due to the dividend cut and broken trust, and buy better high-yield aristocrats like SCHD, BTI, JNJ or MSFT instead.

seekingalpha.com

Relevant topic timeline:

8/23/2023

W. P. Carey Stock: Has The Market Lost Its Mind? No, The Market Is Right (NYSE:WPC)

9/21/2023

W.P. Carey Exiting Office Sector, Spinning Off and Selling Office Properties into New REIT

9/21/2023

W.P. Carey Exits Office Properties as Remote Work Reduces Demand

9/21/2023

W.P. Carey Sells Office Assets, Reduces Debt and Dividend to Refocus on Faster-Growing Industrial Properties

9/25/2023

W.P. Carey's New Strategic Plan Draws Criticism for Dividend Cut, High Costs