In tune with its efforts to enhance stockholders' return,
EastGroup Properties Inc.
) hiked 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.
EastGroup has a consistent track record of increasing
shareholders' wealth. Notably, the company has raised or
maintained its dividend for 21 consecutive years and hiked it for
18 years within this period.
Dividends & REITs
Solid dividend payouts are arguably the biggest attraction for
real estate investment trust (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.
A steady dividend payout is in line with the long-term strategy
of EastGroup to provide attractive risk-adjusted returns to its
stockholders. The announced quarterly dividend rate at this REIT
equates to an annualized rate of common stock dividend of $2.16
per share, resulting in a yield of 3.81% based on the closing
price of EastGroup's stock on Aug 29.
As a matter of fact, EastGroup continues to maintain a strong and
flexible balance sheet. As of Jun 30, 2013, its debt-to-total
market capitalization was 34.6%. For the quarter, the company had
interest and fixed charge coverage ratios of 3.8x.
EastGroup is currently focused on expanding its industrial
properties business in key Sunbelt markets across the U.S. and
primarily in the states of Florida, Texas, Arizona, California
and North Carolina. The company aims at improving its portfolio
with premier business distribution facilities positioned near
major transportation hubs.
Last month, the company reported second-quarter 2013 FFO (funds
from operations) of 80 cents per share, beating the Zacks
Consensus Estimate by nearly 2.6% and the year-ago quarter figure
by 3.9%. Results were driven by solid leasing activities that
helped improve occupancy and reap positive same property
EastGroup also continues to broaden its platform and purchased an
eight business distribution buildings complex in Dallas in May.
Recently, the company also disclosed a number of development
Hence, with strong fundamentals and opportunistic acquisitions,
we believe that the company is well poised to maintain its growth
curves and simultaneously reward shareholders with steadily
EastGroup currently carries a Zacks Rank #2 (Buy). Some other
stocks worth considering in the same industry include
Douglas Emmett Inc
Getty Realty Corp.
). All these stocks also carry a Zacks Rank #2 (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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DOUGLAS EMMETT (DEI): Free Stock Analysis
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