DDR Corp. (DDR), a real estate investment trust (REIT), has recently increased its quarterly dividend for third quarter 2011 by about 50% compared to the last dividend payout in the previous quarter. The common stock dividend of 6 cents per share is payable on October 11, 2011 to shareholders of record at the close of business on September 27, 2011.
The dividend hike is the second of its kind in the current year and denotes continued strong performance by the company backed by solid operating results and a diligent execution of its strategic plan. The company has followed a significant redevelopment program, disciplined acquisition policy, and monetization of non-income producing assets.
DDR Corp. has long been minimizing ground-up development spending in its domestic portfolio, and instead started allocating capital to the lease-up of existing projects. These redevelopments have created a growth opportunity for the company’s existing assets without the level of risk or capital required for new development. This in turn has enabled DDR to de-lever the balance sheet and generate considerable cash flow for portfolio reinvestment as well as increase the cash distribution to its shareholders.
Headquartered in Beachwood, Ohio, DDR Cop. acquires, owns, develops, leases and manages shopping centers and business centers across 41 states in the U.S., along with Puerto Rico and Brazil. At the end of second quarter 2011, DDR Corp. owned and managed 546 retail operating (primarily open-air, value-oriented shopping centers) and development properties spanning approximately 126 million square feet.
We maintain our ‘Neutral’ recommendation on DDR Corp. for the long term. The company presently has a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. We also have a ‘Neutral’ recommendation and a Zacks #3 Rank for Kimco Realty Corporation (KIM), one of the competitors of DDR Corp.
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