Delighting its shareholders, Realty Income Corporation (O), a real estate investment trust (REIT), has announced a hike of 3% in its monthly dividend rate to 18.9 cents from 18.34167 cents paid earlier. Recently another retail REIT, EPR Properties (EPR), announced an increase of over 6% in its monthly dividend rate. Realty Income will pay the new dividend on Feb 17, 2015 to shareholders of record as on Feb 2.
Based on the increased rate, the annualized dividend comes at $2.268 per share, resulting in an annualized yield of about 4.3%, considering Realty Income's closing price of $52.74 on Jan 20.
Realty Income has been consistent in enhancing its shareholders’ wealth by dividend payouts. In fact, this retail REIT latest dividend hike marks its 79th common stock dividend raise since its listing on the New York Stock Exchange in 1994. In fact, the increased dividend for February would reflect a 3.75% hike from the dividend paid in the comparable month a year ago.
We believe that Realty Income’s dividend hike reflects the capacity of its solid portfolio of over 4,200 properties owned under long-term lease agreements, which generates healthy cash flows. The company’s roster includes tenants with reliable and sustainable cash flow, and comprises regional and national retail chains and other commercial tenants like FedEx Corp. (FDX), Family Dollar Stores Inc. (FDO) and Dollar General Corp. (DG).
Solid dividend payouts are arguably the biggest attraction for REIT investors. Apart from Realty Income and EPR Properties, a number of other REITs also came up with dividend hike announcements, of late.
Among them, Cousins Properties Inc. (CUZ) revealed a 7% hike in its quarterly dividend rate, while Chatham Lodging Trust (CLDT) disclosed a 25% increase in its monthly dividend rate.
Realty Income, currently, carries a Zacks Rank #3 (Hold).
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