The shareholders of real estate investment trust (REIT) – Boston Properties Inc. (BXP) have a reason to rejoice as the company has declared a special cash dividend of $2.25 per share, which will be paid on Jan 29, 2014 to stockholders of record as of Dec 31, 2013.
Notably, the disposition of 45% stake in the company’s Time Square Tower property in Oct 2013 is the reason for this special dividend. Boston Properties also declared a regular quarterly cash dividend of 65 cents per share for third-quarter 2013. This dividend is also payable on Jan 29, 2014 to shareholders of record as of the close of business on Dec 31, 2013.
As a matter of fact, Boston Properties came up with encouraging results in October. The company reported third-quarter 2013 FFO (funds from operations) per share of $1.29, which was a penny ahead of the Zacks Consensus Estimate. Also, it exceeded the year-ago quarter figure of $1.15 by 12.2%. The results were aided by higher revenues and improved core operations.
Boston Properties exited third-quarter 2013 with cash and cash equivalents of about $1.64 billion compared with $1.04 billion as of Dec 31, 2012. We believe that the company has sufficient liquidity to comfortably cushion its payout.
Boston Properties is benefiting from improved core operations and has been successful in maintaining a strong grip on high barrier-to-entry geographic markets across the U.S. Also, the company has a solid balance sheet position with adequate liquidity to facilitate further portfolio enhancement activities. We expect this to drive growth and prove accretive to its earnings going forward.
Yet, the demand remains moderate for office space with elevated unemployment levels and adequate space availability, thus creating pressure on rent and occupancies.
Boston Properties currently holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Getty Realty Corp. (GTY), National Health Investors Inc. (NHI) and Sabra Health Care REIT, Inc. (SBRA). All these stocks carry a Zacks Rank #1 (Strong Buy).
Note: 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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