China's Rare Earth Export Halt: When Supply Chain Leverage Becomes a Market Weapon

SPEAKER_1 (0:01)

This is InvestTalk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Justin Klein.

Justin Klein (0:16)

Good afternoon, fellow investors, and welcome back to another week of InvestTalk. This is our Monday, September 14th, 2026 edition of InvestTalk, and it is going to be a wild week. We already had a very interesting kickoff with the news over the weekend around AI safety concerns, and we have the Fed Meeting coming up in just a couple of days. So this promises to be a very explosive week in markets. Now, I'm Justin Klein, and my job here today and every day is to help you become a better investor, not just give you the headlines of why the market moved today or what to look out for, what risks there are in markets, what opportunities we're seeing, et cetera. It's really about instilling the right mindset for you guys so that you can make better decisions with your money consistently. So you're not chasing headlines, you're not chasing performance, you're just chasing good, solid investments that have good risk versus reward and can help you achieve your long-term goals. That's what money in general is all about, is we want to be able to use it. It's not like you just save it and never touch it. There are ways to think about how to save and how to spend and how to invest. I know this is called InvestTalk, but anything money related, we are here to speak on.

And speaking of that, quick heads up, mark your calendars for October 24th. You're invited to join the KPP team and guest experts for our in-person retirement summit. It is free, but seeding is limited.

And you must pre-register at investtalk.com. This is an in-person event. And then we do a lot of webinars. We're getting back to it. We used to do a lot of in-person events back pre-COVID.

Now this is our first real live in-person event. We're excited for it. It is in Irvine, California. It's free of charge. But once again, seating is very limited. We're going to hit a limit at some point and then we're going to be waitlisted. So get in before that happens. Now in just a bit, I'm going to talk about today's marked performance and run down some show topics. But first, as usual, we'll tackle this first caller question now.

SPEAKER_3 (2:42)

My question is on the stock UHT, Universal Health Realty Income. I was just wondering what your thought would be.

SPEAKER_4 (2:50)

And again, this is Steve from Virginia. Thank you.

Justin Klein (2:53)

Steve from Virginia. Let's take a look at UHT, Universal Health Realty Income. It operates a real estate investment trust, which provides health care and human service related services. Okay. So the first thing that sticks out, especially for anybody looking to buy a REIT for the most part is the income. And it does have a pretty good yield, 7.3%. Now, in this environment, rates are higher. So the red flag, higher rates aren't as big of a red flag as they had been in the past. But anything, you know, 6, 7% or more is probably going to be a bit of a red flag and saying, is this high yield really worth it? Is it sustainable? Now, I'm looking at the numbers here. Free cash flow is positive. That's good. But it's only positive by about $48 million.

Has started to roll over. Funds per operation have moved higher, but they've been all over the place. Back in 2019, it was $1.38. And for everyone out there, funds per operation is effectively like the earnings per share for a regular company. Funds per operation is how you measure the income from these properties for a REIT, any type of REIT. Okay. So just think of funds per operation kind of like earnings per share. So it was $1.38 in 2019, with a $7.92 in 2021, then down to $1.11 in 2023

Then back up last year to $3.44, and this year $3.51, $3.61 expected next year. So you're seeing it flatten out at that level. I would imagine here there was some sort of merger, acquisition, I have to go back and look at that history. But this is a name that's certainly fallen from grace. Back in, let's see, pre-COVID, it was moving higher in a significant way. It was at $130 plus per share, then it fell out of bed. And now it's down to $41 per share. Let's look at the dividend. Payer ratio is 214%, which is kind of high. Its dividend has continued to go up. So it does feel confident it can pay that dividend. I just don't have a ton of confidence, mainly because of the debt. Long-term debt is right around 400 million, and that continues to march higher and higher every single year for the past five-plus years. So it's diluting shareholders effectively in order to pay this dividend. So don't think that this is a clear, low-risk investment. It's higher risk.