DDR Corp. (
, a real estate investment trust (REIT), has recently increased
its quarterly dividend by about 12.5% to 13.5 cents. The first
quarter 2013 dividend is payable on April 2 to stockholders of
record as of March 14.
This represents DDR's fifth dividend increase since 2011. If the
current dividend is maintained for the remainder of the year, the
annualized dividend payout of the company would be 54 cents per
The dividend hike reflects continued strong performance by the
company, backed by solid operating results and a diligent
execution of its strategic plan. The company has followed a
significant redevelopment program, disciplined acquisition policy
and monetization of non-income producing assets.
Based on the closing price of $15.69 as on January 08, 2012, the
proposed dividend affirms a yield of 3.44%. A steady dividend
payout facilitates the long-term strategy of DDR to provide
attractive risk-adjusted returns to its stockholders.
Solid dividend payouts are arguably the biggest enticement for
REIT investors as the U.S. law requires these to distribute 90%
of their annual taxable income in the form of dividends to the
We are impressed with the company's dedication towards
continuously enhancing the shareholders' value. DDR has long been
minimizing the ground-up development spending in its domestic
portfolio, and instead started allocating capital to the lease-up
of existing projects. These redevelopments have created a growth
opportunity for the company's existing assets without the level
of risk or capital required for new development. This in turn has
enabled DDR to strengthen the balance sheet and generate
considerable cash flow for portfolio reinvestment as well as
increase the cash distribution to its shareholders.
The REIT industry has been experiencing many dividend hikes
lately. Many of the DDR's peers have recently hiked their
quarterly dividend payouts.
Host Hotels & Resorts, Inc. (
- the largest lodging REIT - increased its fourth-quarter
dividend payout by 80% year over year to a quarterly payment of 9
cents per share or 36 cents on an annualized basis. Another
RLJ Lodging Trust (
, increased its quarterly dividend by 24.0% to 20.5 cents per
DDR is scheduled to release its fourth-quarter 2012 results on
February 12, 2013. The Zacks Consensus Estimate for the
fourth-quarter FFO (fund from operations) is currently pegged at
27 cents per share. The Earnings Surprise Prediction (ESP), which
represents the difference between the most accurate estimate and
the Zacks Consensus Estimate, for DDR is nil. Thus, we expect the
company to report FFO in line with the Zacks Consensus Estimate.
DDR currently holds a Zacks Rank #3 (Hold). However, we maintain
our long-term 'Neutral' recommendation on the stock.
Note: 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.
DDR CORP (DDR): Free Stock Analysis Report
HOST HOTEL&RSRT (HST): Free Stock Analysis
RLJ LODGING TR (RLJ): Free Stock Analysis
To read this article on Zacks.com click here.