CMCT Declares Preferred Stock Dividends
- None.
- None.
Insights
The declaration of dividends on CMCT's Series A, A1 and D Preferred Stock is a significant financial event that may influence investor sentiment and the firm's stock liquidity. The quarterly cash dividends announced are a direct reflection of the company's current cash flow status and its ability to return value to shareholders. Particularly, the annualized dividend rate of 7.83% for the Series A1 Preferred Stock is noteworthy as it exceeds typical savings account and government bond yields, potentially making it an attractive investment for income-seeking investors.
However, investors should consider the sustainability of these dividend payments in the context of the company's overall financial health. The payout ratio, debt levels and free cash flow are critical factors that determine whether dividends are likely to continue at the same rate, increase, or potentially be cut in the future. It is also important to note that preferred stock dividends are typically paid out before common stock dividends, which provides an additional layer of security for preferred shareholders.
The impact of the dividend declaration on CMCT's stock market performance can be multifaceted. On one hand, the commitment to regular dividends can signal to the market that the company is financially stable and confident in its future cash flows, which may bolster investor confidence. On the other hand, the market's reaction could be tempered if the dividends are in line with previous payments or if the declared dividends are perceived as a strategy to maintain stock prices in the absence of growth opportunities.
Moreover, the proration of dividends for Series A1 Preferred Stock issued in the first quarter of 2024 indicates a tailored approach to rewarding investors for their holding period. This could be seen as a move to align shareholder interests with the company's financial calendar, potentially attracting more strategic long-term investors.
The linkage of the Series A1 Preferred Stock dividends to the federal funds rate, with a premium of 2.5%, is a strategic financial decision that aligns shareholder returns with prevailing economic conditions. This structure ensures that the dividend yield remains competitive relative to market interest rates. The current federal funds rate of 5.33% on the applicable determination date suggests that CMCT is adjusting its payouts in response to the broader economic environment, which is characterized by the Federal Reserve's monetary policy decisions.
Investors should consider the implications of potential rate changes by the Federal Reserve, as this could directly affect the dividend payouts of the Series A1 Preferred Stock. An increase in the federal funds rate could enhance the attractiveness of these dividends, whereas a decrease could lead to lower payouts. This interest rate sensitivity introduces an element of risk and opportunity that fixed-income investors, in particular, should evaluate closely.
Series A Preferred Stock
The Board of Directors has declared a quarterly cash dividend of
Series A1 Preferred Stock
The Board of Directors has declared a quarterly cash dividend of
The terms of the Series A1 Preferred Stock provide for cumulative cash dividends (if, as and when authorized by the Board of Directors) on each share of Series A1 Preferred Stock at a quarterly rate of the greater of (i)
The dividend will be payable monthly as follows:
Series D Preferred Stock
The Board of Directors has declared a quarterly cash dividend of
ABOUT CMCT
Creative Media & Community Trust Corporation (“CMCT”) is a real estate investment trust that seeks to own, operate and develop premier multifamily and creative office assets in vibrant and emerging communities throughout
FORWARD-LOOKING STATEMENTS
This press release contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), which are intended to be covered by the safe harbors created thereby. These statements include the plans and objectives of management for future operations, including plans and objectives relating to future growth of our business and availability of funds. Such forward-looking statements can be identified by the use of forward-looking terminology such as “may,” “will,” “project,” “target,” “expect,” “intend,” “might,” “believe,” “anticipate,” “estimate,” “could,” “would,” “continue,” “pursue,” “potential,” “forecast,” “seek,” “plan,” or “should,” or “goal” or the negative thereof or other variations or similar words or phrases. Such forward-looking statements also include, among others, statements about CMCT’s plans and objectives relating to future growth and outlook. Such forward-looking statements are based on particular assumptions that management of CMCT has made in light of its experience, as well as its perception of expected future developments and other factors that it believes are appropriate under the circumstances. Forward-looking statements are necessarily estimates reflecting the judgment of CMCT’s management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include those associated with (i) the timing, form, and operational effects of CMCT’s development activities, (ii) the ability of CMCT to raise in place rents to existing market rents and to maintain or increase occupancy levels, (iii) fluctuations in market rents, (iv) the effects of inflation and higher interest rates on the operations and profitability of CMCT and (v) general economic, market and other conditions. Additional important factors that could cause CMCT’s actual results to differ materially from CMCT’s expectations are discussed under the section “Risk Factors” in CMCT’s Annual Report on Form 10-K for the year ended December 31, 2022. The forward-looking statements included herein are based on current expectations and there can be no assurance that these expectations will be attained. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond CMCT’s control. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements expressed or implied herein will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by CMCT or any other person that CMCT’s objectives and plans will be achieved. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made. CMCT does not undertake to update them to reflect changes that occur after the date they are made, , except as may be required by applicable securities law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240102577337/en/
Media Relations:
Karen Diehl
Diehl Communications
310-741-9097
karen@diehlcommunications.com
or
Investor Relations:
Steve Altebrando, 646-652-8473
shareholders@creativemediacommunity.com
Source: Creative Media & Community Trust Corporation
FAQ
What dividends have been declared by CMCT for the first quarter of 2024?
What is the quarterly cash dividend for CMCT's Series A Preferred Stock for the first quarter of 2024?
What is the annualized dividend rate for CMCT's Series A1 Preferred Stock for the first quarter of 2024?
When will the dividends be payable for CMCT's Series A1 Preferred Stock for the first quarter of 2024?
What is the quarterly cash dividend for CMCT's Series D Preferred Stock for the first quarter of 2024?
