REITs Continue The Dividend Trap

If only companies knew they would be rewarded with aggressive buying of their stock after reducing and/or PIKing cash dividends they likely would have done so much, much sooner... After all why would investors demands cash out of "dividend stocks." This little trick however has not escaped REITs Mack-Cali and Simon Properties. CLI announced after market close today that it would be reducing its dividend by 30%, from $2.56 to $1.80 (a 30% reduction) and would pay the quarterly dividend of $0.45 on April 13 with an ex-div date of April 3.

This is not quite as egregious as what SPG did last Friday, when it decided to pay only 10% of its dividend in cash. But such is life when everyone is looking at your space as the next big potential blow up: saving cash is probably a good idea.