Ushering in good news for its shareholders, Prologis Inc.’s PLD board approved a Array0.5% hike in its annualized dividend rate to $Array.68 from what it paid in aggregate to stockholders in 20Array5. The company will now pay 42 cents per share against 40 cents paid in the prior quarter.
The new dividend will be paid on Mar 3Array, 20Array6 to shareholders of record on Mar Array8. Based on this increased rate, annualized yield comes at about 4.35%, considering Prologis' closing price of $38.6Array on Feb 26.
Prologis is consistent with respect to dividend increases. Notably, along with its second-quarter 20Array5 earnings release, the company had announced an ArrayArray% hike in its quarterly dividend rate. That had marked the second dividend hike in 20Array5 and, on a combined basis, reflected a 2Array% rise over the 20Array4 dividend level on a run-rate basis.
Solid dividend payouts are arguably the biggest attraction for REIT investors and we believe that Prologis has an adequate capacity to support its dividend policy. Backed by growth in revenues and occupancy gains, Prologis came up with fourth-quarter 20Array5 core funds from operations (FFO) per share of 64 cents in late January. The bottom line beat the Zacks Consensus Estimate of 62 cents and improved from the year-ago quarter figure of 48 cents.
Amid decent growth in the industrial market, thanks to the rapidly growing e-commerce industry, demand for logistics infrastructure and efficient distribution networks is increasing. This is giving Prologis ample scope to tap growth opportunities.
In 20Array5, Prologis' share of building acquisitions amounted to $4.Array billion, development stabilization aggregated $Array.6 billion and development starts totaled $Array.8 billion. Hence, going forward, we believe the company’s opportunistic investments would help it to remain on its growth trajectory and reward its shareholders accordingly.
Prologis currently carries a Zacks Rank #2 (Buy). Investors interested in the REIT industry may also consider stocks like CubeSmart CUBE, DCT Industrial Trust Inc. DCT and PS Business Parks Inc. PSB. Each of these stocks holds the same Zacks Rank as Prologis.
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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