Kite Realty Group Trust
) rose 1.33% during the trading session on March 21, following
the quarterly dividend hike announcement the previous day. In
particular, the company will now pay a dividend of 6.5 cents per
share for first-quarter 2014, up from 6.0 cents paid in the prior
quarter, reflecting an 8.3% rise sequentially.
The dividend hike depicts the company's strong operating
performance in 2013, notable acquisitions and high cash flow
generation from premium developments and redevelopments.
Alongside, solid growth in same-property net operating income in
2013 was the driver.
Based on the current dividend rate, the 2014 annual dividend
rate comes to 26 cents per share, 2 cents above the 2013 annual
dividend of 24 cents per share. As a matter of fact, the new
dividend rate results in an annualized yield of about 4.3% based
on Kite Realty's closing price of $6.08 on March 21.
A steady dividend payout is in line with the long-term
strategy of this retail real estate investment trust (REIT) to
provide attractive risk-adjusted returns to its stockholders. As
of Dec 31, 2013, the company had cash and cash equivalents worth
$18.1 million, up from $12.5 million as of Dec 31, 2012. Hence,
we believe Kite Realty has sufficient cash to pay dividends.
Last month, Kite Realty reported fourth-quarter 2013 adjusted
FFO (funds from operations) of 11 cents per share, which was in
line with the Zacks Consensus Estimate and exceeded the year-ago
figure by a penny. The result reflected substantial increase in
revenues, though partially offset by the impact of share dilution
resulting from common shares issuance.
In addition to Kite Realty, a number of other REITs have
increased their dividend payouts this month. This includes
) that announced a 10.6% sequential hike in its quarterly
dividend rate to 26 cents per share. The other is
Taubman Centers Inc.
) that hiked its quarterly dividend by around 8% sequentially to
54 cents per share.
Solid dividend payouts are arguably the biggest attraction for
REIT investors since the U.S. law requires these companies to
distribute 90% of their annual taxable income in the form of
dividends to shareholders.
Kite Realty currently carries a Zacks Rank #3 (Hold). A
better-ranked retail REIT is
Simon Property Group Inc.
) having a Zacks Rank #2 (Buy).
Note: Funds from operations, a widely used metric to gauge
the performance of REITs, is obtained after adding depreciation
and amortization and other non-cash expenses to net
KITE REALTY GRP (KRG): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
TAUBMAN CENTERS (TCO): Free Stock Analysis
UDR INC (UDR): Free Stock Analysis Report
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