We are going a little out on the speculative end with today’s topic. But they have a good story. BSR Real Estate Investment Trust (BSRTF) is a real estate investment trust (REIT) that owns and operates multifamily communities in the Sunbelt region of the United States. They concentrate on large cities that have low unemployment rates such as Austin, Dallas, Houston, Oklahoma City and Little Rock, Arkansas. Headquartered in Little Rock, BSR is a small-cap company with a market cap of just $1.17 billion. (Remember market cap is the share price x the number of shares of the company). Although headquartered in Little Rock, BSR was formed under the jurisdiction of Ontario, Canada and also trades on the Toronto Stock Exchange.
Being a small cap company, they can have wider swings in their share price than a larger, more stable company might have. And the stock price could be more subject to manipulation with a lower volume of shares traded daily. Also, they may not have the economy of scale working to their advantage as a larger REIT might have. BSR is focusing on the right part of real estate though, in my opinion. With houses becoming hard to afford in major southern metro areas, people need to rent before they can jump in and buy a house. Also, the South is experiencing some of the fastest growth in the U.S. with companies and jobs moving to more tax- and regulation-friendly states.
BSR pays a monthly dividend of $.0433 currently. This works out to $.5196 annually and an annual yield of 3.57% at the time of writing. For those retired, this can help replace your monthly paycheck, and if you are reinvesting the dividends, your money will compound a little faster than if you are paid quarterly. This yield is in line with Avalon Bay, a much larger apartment REIT that concentrates on the Northeast, which yields 3.66%. BSR raised their dividend in February 2022 by 3.8% which was the first raise in over 3 years. They have not raised the dividend from the current $.0433/month this year so far. I am hoping when the increase in rents we have been hearing about work their way through the system, BSR will share some with a dividend raise.
BSR stock price has come down in the last year as have most stocks. BSR hit a high of $20.84 last March and hit a low of $12.60 in January of this year. The stock price has recovered about 18% since January’s low. It is still in the lower end of its range, but may take a while to fully recover if interest rates stay up or increase this year.
I do not own share of BSR Real Estate Trust, but am interested in them and may stick my toe in before long. I just like the business model they have, and as they say in real estate – location, location, location. I used Schwab, Fidelity and BSR’s web site for my references. As always, do your own research and due diligence before investing.
(Intentional Investing is a weekly column written by Kyle Smith from Floyd County, TX, based upon his investment knowledge and does not represent the views or opinions of the Floyd County Record)
