Motley Fool Income Investor
selection Capital Automotive
After the transaction closes, Capital Automotive will continue on its path of acquiring solid-performing multi-franchise dealerships of vehicles from Honda
Given the healthy returns in the real estate investment trust (REIT) market over the last few years, and the relatively full prices of most REITs, I am mildly surprised to see such an acquisition announced. However, like fellow Income Investor selection American Financial Realty
It's certainly bittersweet to see a company with growth prospects, strong dividend payments, and room to grow its dividend get bought out. The ideal situation would have been to continue reaping the solid 5% dividend and enjoying the success of the business as it grows.
But while the buyout may disappoint our Income Investor subscribers, it's difficult to quibble with the final results of this recommendation. In just about a year, subscribers have received a 25.8% return vs. the S&P 500's 10.2% -- and that return is pretty much locked in now. Since the company will continue paying dividends until the acquisition is completed, investors stand to gain still a bit more by holding on to enjoy another dividend payment or two before they receive the full offering price of $38.75 per share.