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Clipper Realty Inc. (CLPR) Q4 2023 Earnings Call Transcript

Clipper Realty Inc. (CLPR) came out with quarterly funds from operations (FFO) of $0.15 per share, missing the Zacks Consensus Estimate of $0.16 per share. This compares to FFO of $0.11 per share a year ago.

REITs crashed due to rising interest rates. But they are now set to rally as interest rates are cut in 2024. The window of opportunity is closing fast, but opportunities remain abundant.

Clipper Realty is a residential/retail REIT that owns and manages properties in the New York metropolitan area. The company has a concentrated portfolio, which may be unattractive for investors seeking broader exposure. Even though the discount to NAV appears large and the dividend yield is high, its financial health is concerning, with high leverage, low liquidity, and a potentially unsafe dividend.

Clipper Realty is currently paying out a 7.7% dividend yield. The most recent distribution was 158% covered by its third quarter adjusted FFO. Its long-dated maturity profile and high insider ownership have reduced the likelihood of a dividend reduction.

Clipper Realty Inc. (NYSE:CLPR ) Q3 2023 Earnings Conference Call November 2, 2023 5:00 PM ET Company Participants Larry Kreider - Chief Financial Officer David Bistricer - Co-Chairman of the Board and Chief Executive Officer J.J. Bistricer - Chief Operating Officer Operator Good day and welcome to the Clipper Realty Quarterly Earnings Call.

Clipper Realty Inc. (CLPR) came out with quarterly funds from operations (FFO) of $0.15 per share, missing the Zacks Consensus Estimate of $0.17 per share. This compares to FFO of $0.12 per share a year ago.

Clipper Realty is offering a 7.2% dividend yield, but its dividend is far from safe, partly due to a forward FFO payout ratio of 106%. The commercial properties of Clipper Realty have been negatively impacted by an accelerated shift to e-commerce. The REIT has a high debt load and has underperformed the market, making it a risky investment for income-oriented investors.

Clipper Realty Inc. (CLPR) is technically in oversold territory now, so the heavy selling pressure might have exhausted. This along with strong agreement among Wall Street analysts in raising earnings estimates could lead to a trend reversal for the stock.

The mean of analysts' price targets for Clipper Realty Inc. (CLPR) points to a 63.7% upside in the stock. While this highly sought-after metric has not proven reasonably effective, strong agreement among analysts in raising earnings estimates does indicate an upside in the stock.