This FTSE 250 stock yields 11%. Here’s what I’d do

first_img Our 6 ‘Best Buys Now’ Shares Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. See all posts by Roland Head If you could buy a house for less than half its advertised price, would you do it?You might be tempted. But I suspect that you’d stop and ask yourself why it was so cheap. Has the property been reduced for a quick sale? If so, why?5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Today I want to look at a property stock that currently trades at a 67% discount to its book value, and offers a dividend yield of 11%.This stock could be a bargain for brave buyers who can go against the trend. But the current share price could also be a sign that this business has shaky foundations.An impressive historyThe company concerned is FTSE 250-listed REIT Hammerson (LSE: HMSO). This real estate investment trust has been listed on the London market since 1954, making it one of the older stocks on the market today.Hammerson’s flagship properties include London’s Brent Cross shopping centre and the Birmingham Bullring. Properties such as this – and many more – have provided attractive dividends for shareholders over the last 30 years, although the payout has been cut on a few occasions.Bad timingHowever, over the last few years, Hammerson has been caught on the wrong side of the retail property slump.  In 2018, the company’s rental income fell by 6.2% as tenants moved out or negotiated lower rents. The value of Hammerson’s property portfolio fell by 5.9% to £9,938m. Unfortunately, the trust wasn’t able to repay debt quickly enough to offset this decline, so its loan-to-value ratio rose from 40% to 43%.In the first half of 2019, things got worse. Rental income fell by 12.3% to £156.6m, and the value of Hammerson’s property slid 4% to £9,542m. Its loan-to-value ratio rose again, to 46%.Throughout this time, the company had held its generous dividend unchanged, even though chief executive David Atkins said his “absolute priority remains to reduce debt”.Instead of cutting the dividend, Atkins has been selling property to repay debt. But an update on Friday suggests to me that this process is becoming quite desperate.OuchWould you knock 22% off the price of your house for a quick sale? I suspect you’d only agree to this if you were desperate. But that’s exactly what Hammerson has done with its latest property disposal.On Friday, the company said that it had sold seven retail parks across the UK for £400m. This represented “a discount to a June 2019 book value of 22.2%”. I can only see two ways to read this. One is that property prices for retail parks are really crashing hard. I suspect prices are falling, but I don’t think they’re falling as fast as that. The other explanation is that Hammerson is becoming a distressed seller, desperately flogging assets to raise cash. In this scenario, the sale price would make sense to me.What next?Hammerson hasn’t yet cut its dividend. But the company is due to issue its 2019 results on Tuesday and I believe investors should be prepared for a cut.Even if the company doesn’t cut the payout this time, my analysis of the firm’s latest accounts suggests that the dividend is unaffordable and will eventually be chopped. In my view, Hammerson is a stock to avoid under its current management. Simply click below to discover how you can take advantage of this. “This Stock Could Be Like Buying Amazon in 1997” I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.center_img Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Image source: Getty Images. Roland Head | Sunday, 23rd February, 2020 | More on: HMSO Enter Your Email Address I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. This FTSE 250 stock yields 11%. Here’s what I’d dolast_img read more