Well, its been a few weeks since we talked about restaurant REIT TSY. Motley Fool recently had an article explaining that they have used lease cash flow to cover their dividend. In the past they had relied on proceeds from asset sales (which I still contend is a fair strategy for their space of the real estate industry). The author has concerns on some other issues and these are mentioned in the article. (ie debt levels)


From the article,

"For the fourth quarter, Trustreet turned in $0.34 per share in funds from operations (FFO), marking the first quarter in its short history in which the FFO has fully covered the $0.33 per share in quarterly dividend payments. (The company pays out $0.11 per share monthly.) In truth, Trustreet's profits on the sales of non-core assets and cash received toward the principal on capital leases more than provided the cash needed to fund the dividend in the past two quarters, but it is always preferable to see a dividend covered by FFO.


The most important concern with this company continues to be its high level of total debt and concentration of variable-rate debt. Secondary concerns include the quality of its tenants and how they perform in a more difficult economic environment, plus the soon-to-expire lockup on the company's secondary offering, which was completed in December."