Dividend Hike at Alexandria - Analyst Blog

By Zacks Equity Research,

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Alexandria Real Estate Equities Inc. ( ARE ) - a real estate investment trust (REIT) - recently announced a 7% hike in its quarterly cash dividend rate. The company will now pay a dividend of 60 cents per share for first quarter 2013, up 4 cents from the prior-quarter dividend. The increased dividend will be paid on Apr 15, 2013 to stockholders of record on Mar 28.

Alexandria is focused on managing its capital conservatively and over the past 12 months, the company has augmented its quarterly cash dividend rate by 11 cents or approximately 22%.

As of Sep 30, 2012, Alexandria's funds from operations payout ratio (quarterly common stock dividend divided by quarterly funds from operations) was 49%. At year-end 2012, cash and cash equivalents stood at nearly $141 million. We believe that the company has adequate cash to provide optimum shareholder value.

Alexandria Real Estate expects to distribute excess cash to the shareholders through the increased dividend and concurrently looks to maintain its cash flow for further reinvestments. 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 the shareholders.

Pasadena, Calif.-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 laboratory space.

In addition to Alexandria, many other REITs have raised their dividends in the recent months. Recently, Taubman Centers Inc. ( TCO ) announced an 8.1% hike in its quarterly cash dividend rate, while in February, Simon Property Group Inc. ( SPG ) raised its dividend by 4.5% sequentially and BRE Properties Inc. ( BRE ) declared a 2.6% sequential hike in its quarterly cash dividend.

Alexandria currently has a Zacks Rank #3 (Hold).

ALEXANDRIA REAL (ARE): Free Stock Analysis Report

BRE PROPERTIES (BRE): Free Stock Analysis Report

SIMON PROPERTY (SPG): Free Stock Analysis Report

TAUBMAN CENTERS (TCO): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: ARE , BRE , SPG , TCO

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