Shares of GEO Group Inc. GEO, +0.52% sank 3.5% in premarket trading Wednesday, after the real estate investment trust said it has immediately suspended its dividend, and will evaluate its structure as a REIT. The company said it plans to maximize the use of cash flows to repay debt and internally fund growth. The company last paid a quarterly dividend of 25 cents a share in January. Based on Tuesday’s stock closing price of $7.80, the annual dividend rate had implied a dividend yield of 12.82%, compared with the yield on the SPDR Real Estate Select Sector ETF XLRE, +0.25% of 3.29% and the implied yield for the S&P 500 SPX, -0.10% of 1.42%. “The board expects to conclude its evaluation in the fourth quarter of 2021, and should the Board determine not to change its current intent to maintain GEO’s REIT status, an additional dividend payment may be required before year-end in order to meet the minimum REIT distribution requirements under the Code,” the company said in a statement. The stock has tumbled 34.1% over the past 12 months, while the real estate ETF has climbed 28.6% and the S&P 500 has run up 53.2%.
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