Sovran Self Storage, Inc.
) declared a 28.3% hike in its quarterly cash dividend rate. The
company will now pay a dividend of 68 cents per share compared
with 53 cents paid in the prior quarter. The increased dividend
will be paid on Jan 27, 2014 to stockholders of record as of Jan
The dividend hike at this Self storage real estate investment
trust (REIT) is based on its solid operating results over the
last two years, improved outlook and an enhanced financial
Sovran Self Storage has made concerted efforts towards
increasing shareholders wealth. Notably, this is the third
dividend increase by the company in the past 12 months that has
resulted in a total increase of more than 50% to
After incorporating the new dividend, Sovran Self Storage's
total 2013 dividend came in at $2.72 per share. This reflects a
28.3% hike from the 2012 dividend. As a matter of fact, the new
dividend rate results in an annualized yield of 4.18% based on
the Sovran Self Storage's closing price of $65.02 on Jan 6.
Sovran Self Storage came up with a better-than-expected result
in the third quarter that was released in early November. The
company reported third-quarter 2013 adjusted FFO of $1.01, ahead
of the Zacks Consensus Estimate of 97 cents and the year-ago
figure of 88 cents.
The results were aided by continued occupancy growth and
higher net rental rates. Further, the company also increased it
2013 funds from operations (FFO) per share outlook to the range
of $3.77 to $3.79, from $3.70 to $3.74 forecasted earlier.
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.
Of late, many REITs have increased their quarterly dividend
payouts. On Jan 6,
) hiked its first-quarter 2014 dividend by 14.8% to 15.5 cents
per share from 13.5 cents paid in the prior quarter. Moreover,
last month, a healthcare real estate investment trust (REIT),
), announced an 8.2% sequential hike in its quarterly cash
Currently, Sovran Self Storage carries a Zacks Rank #2 (Buy).
The other player in the REIT-Equity Trust-Other industry, which
looks attractive at current levels includes
Getty Realty Corp.
) with a Zacks Rank #1 (Strong Buy).
FFO, a widely used metric to gauge the performance of REITs,
is obtained after adding depreciation and amortization and other
non-cash expenses to net income.
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