In tune with its efforts to boost stockholders’ return, real estate investment trust (REIT), Cousins Properties Incorporated (CUZ) hiked its quarterly cash dividend by 67% sequentially to 7.5 cents per share. With this, the company’s dividend equates to 30 cents on an annualized basis.
The increased first-quarter dividend will be paid on Feb 24 to shareholders of record as of Feb 10. The uptick reflects successful implementation of the company’s strategic plan over the recent years. Notably, Cousins Properties current annual dividend yield is fairly decent at approximately 2.84%, based on its closing price of $10.55 as on Jan 17.
In third-quarter 2013, Cousins Properties reported funds from operations (FFO) per share of 11 cents, beating the Zacks Consensus Estimate by a penny. This was driven by increase in revenues as well as occupancy and leasing gains. The company is scheduled to release its fourth-quarter earnings after the market closes on Feb 13, 2014.
Cousins Properties’ portfolio is primarily concentrated in the high-growth Sun Belt markets, which due to their long-term demographic trends, should exhibit above-average job growth. Therefore, with the favorable long-term forecasts for its markets remaining strong, we believe that the company has ample scope to ride on the growth trajectory, going forward. Its focus on building its business on a simpler platform, by specifically targeting trophy assets and opportunistic investments, ensures a steady revenue stream.
Moreover, Cousins Properties maintains a flexible balance sheet with ample liquidity that enables it to capitalize on acquisition opportunities to fuel its growth engine. At quarter end, the company had cash and cash equivalents of $5.4 million, up from $4.9 million as of Jun 30, 2013. We believe that it has adequate cash to continue with strategic investments and reward shareholders, going forward.
Apart from Cousins Properties, many other REITs have increased their dividends in the recent times. These include Omega Healthcare Investors Inc. (OHI) that raised its quarterly cash dividend by 2.1% to 49 cents per share from 48 cents paid in the last quarter as well as DDR Corp. (DDR), which announced a 15% hike in its quarterly dividend rate to 15.5 cents. Also, last month, Host Hotels & Resorts, Inc. (HST) increased its quarterly cash dividend by 8.3% sequentially to 13 cents per share.
Solid dividend payouts are arguably the biggest attraction for REIT investors as the U.S. law requires these companies to distribute 90% of their annual taxable income to shareholders.
Cousins Properties currently carries a Zacks Rank #3 (Hold).
Note: Funds from operations, a widely accepted and reported measure of REITs performance, are derived by adding depreciation, amortization and other non-cash expenses to net income.
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