Alexandria Real Estate Equities Inc.
) announced a 5% hike in its quarterly cash dividend rate,
reflecting a dividend increase for the sixth consecutive quarter.
This real estate investment trust (REIT) will now pay a dividend
of 68 cents per share for third-quarter 2013, up 3 cents from the
prior-quarter dividend. The increased dividend will be paid on
Oct 15, 2013 to stockholders of record on Sep 30.
Alexandria Real Estate has a consistent track record of
increasing shareholders' wealth. With the latest dividend hike,
the company has achieved a 15 cents or 28% year-over-year
increase. Most recently, the company hiked its dividend by 8% to
65 cents in the prior quarter.
With low funds from operations (FFO) payout ratio of 65% as of
Jun 30, 2013, the company has adequate room to enhance its
dividend rate going forward. Hence, we remain encouraged.
Moreover, the announced quarterly dividend rate at this REIT
equates to an annualized rate of common stock dividend of $2.72
per share, resulting in a yield of nearly 4.30% based on the
closing price of Alexandria Real Estate's stock on Sep 9.
As of Jun 30, 2013, Alexandria Real Estate had cash and cash
equivalents worth $302.2 million, up from $87.0 million as of Mar
31, 2013. We believe that the Pasadena, Calif.-based Alexandria
Real Estate - major owner and leading life science real estate
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.
The other REIT -
EastGroup Properties Inc.
) - has recently announced a hike in its quarterly cash dividend
sequentially by 1.9% to 54 cents per share from 53 cents. The new
dividend will be paid on Sep 30, 2013 to shareholders of record
as of Sep 19, 2013. Notably, EastGroup has raised or maintained
its dividend for 21 consecutive years and hiked it for 18 years
within this period.
Alexandria currently has a Zacks Rank #3 (Hold). However, two
other REITs that are performing well and deserve a look are
Highwoods Properties Inc.
), both carrying a Zacks Rank #2 (Buy).
FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.
ALEXANDRIA REAL (ARE): Free Stock Analysis
CUBESMART (CUBE): Free Stock Analysis Report
EASTGROUP PPTYS (EGP): Free Stock Analysis
HIGHWOODS PPTYS (HIW): Free Stock Analysis
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