Dividend traps are a type of investment trap that occurs when investors are attracted to high dividend yields but end up losing money due to underlying problems with the company’s financial health. Dividend traps can be particularly tempting to new or inexperienced investors who may not fully understand the risks involved with high-yield stocks.

The allure of dividend traps lies in the promise of a steady stream of income from dividends, which are payments made by a company to its shareholders. Dividend payments are usually made quarterly or annually and can provide investors with a reliable source of passive income.

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Common stocks, bonds, and Real Estate Investment Trusts (REITs) are three different types of investments that have different characteristics and are suitable for different types of investors.

Common stocks, also known as equities, represent ownership in a company. When you own a stock, you own a small piece of the company and have the potential to earn a return through dividends and capital appreciation. Stocks are considered to be riskier than bonds, but also have the potential for higher returns. The value of a stock can be affected by a variety of factors, including the company’s financial performance, the overall state of the economy, and the performance of the stock market.

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In a recent press release, AREIT will add the One Ayala Avenue Towers and Glorietta 1 and 2 (malls + BPO office) this year, subject to shareholder approval.

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It plans to use the proceeds to acquire more land and ultimately increase CREIT’s landholdings to 7 million sqm from the current 1.98 million sqm. These properties will then earn rental income from the solar plants that will be built on it.

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That 12% dividend increase compared to 2021 happens to be higher than the inflation rate. So AREIT investors have not lost their purchasing power if you only consider the dividend income. These are real returns on your money.

As a long term income investor, I consider dividend per share (DPS) growth as one of the most important metrics in a REIT – far more than stock price appreciation or the dividend yield.

I have attached their press release below. Its worth noting that their growth target remains to be 100,000 sqm of GLA every year for the next 3 years and total shareholder return (stock price plus dividends) of 10-12% yearly.

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