Alexandria Real Estate Equities Inc.
) - a real estate investment trust (REIT) - recently announced an
8% hike in its quarterly cash dividend rate. The company will now
pay a dividend of 65 cents per share for second-quarter 2013, up
5 cents from the prior-quarter dividend. The increased dividend
will be paid on Jul 15, 2013 to stockholders of record on Jun 28.
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With low funds from operations (FFO) payout ratio of 55% as of
Mar 31, 2013, the company has adequate room to enhance its
dividend rate going forward. Most recently, the company hiked its
dividend by 7% to 60 cents in the prior quarter.
Therefore, the current dividend hike move justifies the company's
effort to boost its shareholders' wealth. Hence, we remain
encouraged. Notably, with the latest dividend hike, the company
has achieved a 14 cents or 27% year-over-year increase.
As of Mar 31, 2013, Alexandria Real Estate had cash and cash
equivalents worth $87.0 million, up from $77.4 million as of Mar
31, 2012. We believe that the company has adequate cash to
provide optimum shareholder value.
As a matter of fact, solid dividend payouts are arguably the
biggest attraction for REIT investors as the U.S. law requires
these companies to distribute 90% of their annual taxable income
in the form of dividends to shareholders.
Pasadena, CA-based Alexandria Real Estate is a major owner and
leading life science real estate company, focused chiefly on
science-driven cluster development through the ownership,
operation, management, and selective acquisition, development,
and redevelopment of properties containing life science
Alexandria currently has a Zacks Rank #3 (Hold). However, a
number of REITs that are performing well and deserve a look
Sunstone Hotel Investors Inc.
), both carrying a Zacks Rank #1 (Strong Buy) as well as
) that has a Zacks Rank #2 (Buy).