Technology

UDR Rewards Investors With 6.2% Hike in Common Stock Dividend

UDR, Inc. UDR recently rewarded investors with a 6.2% hike in its first-quarter 2019 dividend. The company will now pay 34.25 cents per share, higher than the prior dividend of 32.25 cents. This marks the UDR’s 186th consecutive quarterly dividend distribution on its common stock.

Based on the hiked rate of 34.25 cents for the quarter, the annual dividend comes to $1.37 per share. This new dividend will be paid on Apr 30, to shareholders of record on Apr 9, 2019. At this new rate, annualized yield comes at 3.01%, based on the stock’s closing price of $45.50 on Mar 28.

The latest hike reflects the residential real estate investment trust’s (REIT) ability to generate solid cash-flow growth through its operating platform and high-quality portfolio. With a current cash flow growth rate of 14.5%, ahead of the industry’s average of 3.54%, the increased dividend is likely to be sustainable.

This February, UDR reported fourth-quarter 2018 funds from operations, as adjusted (FFOA) per share of 50 cents, surpassing the Zacks Consensus Estimate by a whisker. The figure came in higher than the prior-year tally of 48 cents. Results mirrored growth in revenues from rental income and revenues from operating and lease-up communities.

UDR also adheres to disciplined capital allocation and maintains a strong balance-sheet position. This enhances the company’s cash flows, supporting operational efficiency and dividend growth. This, we believe, along with the company’s robust operating platform and efficient management team, will help it execute strategic priorities and drive net asset value and dividend growth over the long term as well. In fact, as of Dec 31, 2018, the company had around $1.3 billion available from a combination of cash and undrawn capacity on its credit facilities.

UDR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of the company have gained 27.7% over the past year, outperforming the industry’s growth of 18.9%.


Notably, solid dividend payouts remain arguably the biggest attraction for REIT investors as the U.S. law requires these companies to distribute 90% of the annual taxable income in the form of dividends to shareholders. Apart from UDR, some other REITs which announced dividend hikes lately are American Tower Corporation AMT, Taubman Centers, Inc. TCO and Equity Residential EQR.

American Tower recently rewarded its investors with 7.1% sequential hike in quarterly dividends on the company’s common shares. Specifically, the company hiked its dividend to 90 cents from the 84 cents paid earlier. The raised dividend is scheduled to be paid on Apr 26, to shareholders on record as of Apr 11, 2019.

Taubman Centers has also announced rewards for its shareholders in the form of a 3.1% sequential hike in the quarterly dividend rate on common stock. In fact, the quarterly dividend of 67.5 cents comes in higher than the previously-announced figure of 65.5 cents. The new dividend is scheduled to be paid on Mar 29 to shareholders of record as of Mar 15, 2019.

Also, bringing in good news for its shareholders, Equity Residential announced an increase in its current-quarter dividend. The company will now pay 56.75 cents per share, which reflects a hike of 5.1% from the prior dividend of 54 cents. This new dividend will be paid on Apr 12, to shareholders of record on Mar 25, 2019. 

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