As Josh Peters, author of The Ultimate Dividend Playbook, explains, “durability implies that the firm can take a financial punch in one year and come back swinging the next”. Durability also suggests that “an earnings stream that, if not quite predictable in any one year, can be relied upon over a series of years, during which short-term fluctuations average out”.
When I select REITs for my Durable Income Portfolio, it’s important to select the most reliable performers. When I see a company with highly predictable earnings and dividend growth, it signals that the overall durability score is high and that there is enhanced opportunity for out-performance.
Recognizing that the vast majority of REITs have sold off year-to-date, I find myself working feverishly to focus on the most durable names. As a means to track all of the REITs in the Intelligent REIT Lab, I am in the process of updating all of the Rhino REIT scores, a process that allows subscribers to distinguish the most durable REITs, taking into account a number of qualitative and quantitative analytics.
