Dividend Stocks vs REITs for Safe Cash Flow | Summary and Q&A

TL;DR

Dividend stocks are facing significant drops in cash flow, making real estate investment trusts (REITs) a more favorable option for investors seeking cash yield and safety.

Key Insights

• 💦 Dividend stocks are experiencing significant cash flow drops, with a 32% decrease this year.
• 😀 Dividend cuts in stocks are expected to average 25% or more, with certain sectors facing major cash flow problems.
• ❓ REITs offer stability in dividends due to their requirement to pay out 90% of taxable income.
• 👾 Commercially-focused REITs are performing better than those relying heavily on malls and retail spaces.
• 🍉 REITs have outperformed stocks in the long term, with an 1800% return over the last 30 years.
• 🅰️ The Vanguard Real Estate ETF (V&Q) has underperformed the market this year, but individual property types may offer better opportunities.
• ❓ The Streetwise REIT has maintained an 8%+ dividend yield since inception and has been resilient during the market chaos.

Transcript

dividend stocks are getting slammed and many investors are wondering how to make up for that lost cashflow in this video we'll compare dividend stocks versus real estate investment trusts for cash yield and safety I'll show you why real estate is the best bet right now and how one fund in my portfolio is paying an 8% Plus yield we're talking divide... Read More

Questions & Answers

Q: Why are dividend stocks experiencing significant drops in cash flow?

Dividend stocks are being hit by the current market situation, with companies slashing dividends to conserve cash. Sectors like energy and retail are particularly affected.

Q: How much did dividends contribute to the total stock market return historically?

Dividends have accounted for 40% of the total stock market return since 1926. They are an important source of income for many investors.

Q: Why are REITs a safer option for dividend yield?

REITs are required by law to distribute at least 90% of their taxable income as dividends. This ensures a consistent cash flow for investors even in challenging times.

Q: What property types within the real estate sector are performing well?

REITs with digitally-focused, storage, and industrial properties are faring better compared to those heavily reliant on malls and retail spaces.

Summary & Key Takeaways

• Dividend stocks have experienced a 32% drop in cash flow this year, while REITs have maintained an 8%+ dividend yield.

• Dividend cuts in stocks are expected to average 25% or more, with energy, consumer discretionary, and real estate sectors being hit the hardest.

• REITs offer stability in dividends due to their requirement to pay out 90% of taxable income, and their commercially-focused properties also contribute to their resilience.