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Forget Rate Hike, Special Dividends Pouring in from REITs

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If you are an investor in the REIT industry and have been bogged down by the FOMC meeting outcome and rate hike moves, then this is the time to think again. This is because a number of REITs, like General Growth Properties, Inc. GGP , Highwoods Properties, Inc. HIW and Kilroy Realty Corp. KRC , have come up with their special dividend announcements, which is surely a good news for income-seeking investors.

Specifically, General Growth has declared a special cash dividend of 26 cents per share which is payable on Jan 27, 2017, to shareholders of record as of Dec 27, 2016. This is in addition to the fourth-quarter cash dividend of 22 cents, which is slated to be paid on Jan 6, 2017, to stockholders of record as of Dec 15, 2016.

Usually, special dividends are paid by REITs on capital gains from the sale of assets to avoid paying taxes. Notably, solid dividend payouts remain arguably the biggest enticement for REIT investors as the U.S. law requires these companies to distribute at least 90% of their taxable income to shareholders, annually, in the form of dividends.

The other REIT - Highwoods Properties - came up with a special dividend announcement of 80 cents per share, which is payable on Jan 10, 2017 to shareholders of record as of Dec 27, 2016. This is primarily the outcome of the distribution of the taxable capital gains related to the sales of its Country Club Plaza assets earlier in 2016. Highwoods also pays a quarterly common stock cash dividend of 42.5 cents per share.

Moreover, Kilroy Realty announced a special cash dividend of $1.90 per share, which is a due to the distribution of taxable income, mainly associated with gains from the sale of real estate property in 2016. The company will pay the dividend on Jan 13, 2017 to shareholders of record as of Dec 30, 2016. Kilroy Realty will also pay a regular quarterly dividend of 37.5 cents per share.

Moreover, bringing in good news for investors, particularly the income seeking ones, recently a number of REITs declared their dividend hikes. Among them are Mid-America Apartment Communities, Inc. MAA and SL Green Realty Corp. SLG , which announced a 6% and 7.6% hike in their dividend payouts, respectively.

Currently, Highwoods Properties and Kilroy Realty carry a carry a Zacks Rank #3 (Hold). However, General Growth has a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Year to date, shares of Highwoods Properties have logged in a return of 15.1%, while Kilroy Realty's shares ascended 19.4% against the Zacks categorized REIT - Equity Trust - Other industry's gain of just 4.7%. However, shares of General Growth fell 3.5% against around 2.0% increase of the Zacks categorized REIT - Equity Trust - Retail industry.

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GENL GRWTH PPTY (GGP): Free Stock Analysis Report

MID-AMER APT CM (MAA): Free Stock Analysis Report

HIGHWOODS PPTYS (HIW): Free Stock Analysis Report

SL GREEN REALTY (SLG): Free Stock Analysis Report

KILROY REALTY (KRC): Free Stock Analysis Report

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


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

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