Global Medical REIT: Why I Skipped The Commons And 7.4% Yielding Preferreds

2025-09-26 23:25:00 ET

Global Medical REIT ( GMRE ) faces heavy near-term refinancing liabilities that will place pressure on its funds from operations ("FFO") and could work to dampen its dividend coverage. This renders a position in the common shares as a tougher sell, even with an elevated dividend yield. GMRE focuses on healthcare facilities leased to physician groups and regional and national healthcare systems. The REIT engineered a one-for-five reverse stock split last month, which is important to note for the adjustment of the per-share metrics. Essentially, multiply the pre-reverse stock split metric by 5. GMRE last reported a quarterly cash dividend of $0.75 per share , around $0.15 per share pre-reverse stock split. The figure annualizes at $3 per share for an 8.9% dividend yield. GMRE had previously cut the payout by 29% in May, breaking away from what had been stable distributions since 2016. The REIT also has publicly traded preferred shares; the 7.50% Series A Cumulative Redeemable Preferreds ( GMRE.PR.A ), which pays out a $1.88 annual coupon for a 7.4% dividend yield. Which is the better buy? Likely the common shares, but I'm not a fan of either security....

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