Corona virus fails to cause any hindrance to the dividend growth of MGM Growth Properties. The MGM owner does not allow the Corona Virus pandemic deter the growth in the company dividends.
It is reported by Gaming Real Estate Investment Trust on Friday that it is increasing its quarterly by half a cent to 47.5 cents a share. It amounts to $1.90 a year.
A Statement stated that “The tenth dividend increase by MGP’s initial public offering in April 2016 will be payable on April 15, 2020 to all shareholders of record, as of the close of business on March 31, 2020”.
It was indeed a very brave move in Corona Virus infested Environment
When the Wall Street is not encouraging the companies approach to capital, because of the fear of Corona Virus epidemic may cause an economic recession, the MGP’s dividend hike is an indeed bold move. The investment community maintains a sentiment preferring companies with sufficient cash on their balance sheets and with strong credit ratings, in the present environment of COVID-19 global infestation.
The primary tenant of MGP, MGM Resorts International made a statement that it is scrapping a $1.25 billion shares repurchase scheme.
Gaming REITs like MGP are following their operator tenants to the downfall, as the COVID-19 epidemic outbreak is taking hold of the United States. Shares of MGP are lower by 31.15% this month, when it saw a benefit of Friday’s 20.32% gain. This was accrued on more than triple the average daily volume.
It is still a dismal performance month to date. But it is far less bad than MGM’s 54.13% fall since March 1st. The dividend increase offered by MGP will hike the cash generating efforts of the previous parent company. MGM owns 55% stake of this real estate company.
Las Vegas strip generates about 40% of the lease income for MGP. MGP owns property assets of Excalibur there, with other properties such as Luxor, Mandalay Bay, MGM Grand, Mirage and New York New York. These properties have been beset by cancellations, with other Sin City Venues, closed venues and postponements. It is since Corona virus outbreak was in US.
MGP also owns the real estate of Empire City in Yonkers, in New York. COVID-19 pandemic has caused temporary shuttering of MGM Springfield in Massachusetts, and MGM Northfield Park at Ohio.
But because of the gaming REIT’s business models, there should be no or minimum effects on the company’s revenue. The tenants have to pay their leases regardless of what shape the economy is in.
Last year end, MGP had $100.7 million in free cash. This company paid in 2019 $533.47 million in dividends.