Adding to the delight of investors, Alexandria Real Estate Equities, Inc. (ARE) has increased the cash dividend for fourth-quarter 2014 by 9% on a year-over-year basis and 3% on a sequential basis to 74 cents a share. The hike in dividend by the Pasadena, CA-based Equity Real Estate Investment Trust (“REIT”) reflects the company’s robust and rising cash flows from operations as well as its intention to reward shareholders. The dividend will be paid on Jan 15, 2015, to shareholders of record on Dec 31.
Alexandria Real Estate paid a cash dividend of 72 cents a share for third-quarter 2014 and 68 cents a share for fourth-quarter 2013. The common stock dividend for 2014 (last four quarters ending on Dec 31, 2014) adds to $2.88 per common share, an increase of 27 cents, or 10%, compared with the total dividend of $2.61 per share for 2013.
Importantly, the company also continues to retain cash flows from operating activities for reinvestment into value-generating operations. Notably, as of Sep 30, 2014, payout ratio, which is derived by dividing the quarterly common stock dividend by quarterly funds from operations, scales very low at 60%, which is a favorable sign. This implies that the company has the capability to raise dividends further.
Currently, Alexandria Real Estate carries a Zacks Rank #3 (Hold). Investors interested in Equity-REITs may consider better-ranked stocks like Corrections Corporation of America (CXW), Ashford Hospitality Trust, Inc. (AHT) and Cousins Properties Incorporated (CUZ). While both Corrections Corporation and Ashford Hospitality Trust sport a Zacks Rank #1 (Strong Buy), Cousins Properties has a Zacks Rank #2 (Buy).
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