Delighting its shareholders, Cousins Properties Inc. (CUZ) announced a 7% hike in its quarterly dividend rate to 8 cents from 7.5 cents paid earlier. The new dividend for first-quarter 2015 will be paid on Feb 23, to shareholders of record as on Feb 6.
Following the news, shares of Cousins Properties edged up 0.09% during the regular trading session on the NYSE on Jan 16. Optimism is also prevalent in the broader REIT market as well, driven by expectations for a continued low rate environment for some more time given the modest growth pace of the economy.
Based on the increased rate, the annualized dividend comes at 32 cents per share, resulting in an annualized yield of about 2.85%, considering Cousins Properties' closing price of $11.23 on Jan 16.
We believe that Cousins Properties’ dividend hike demonstrates its solid cash flow generating capabilities. Notably, aided by revenue growth, the company reported third-quarter 2014 funds from operations (“FFO”) of 20 cents per share, beating the Zacks Consensus Estimate by a penny and comfortably surpassing the year-ago figure by 9 cents.
As a matter of fact, solid dividend payouts are arguably the biggest enticement factor for REIT investors. Apart from Cousins Properties, a number of other REITs came up with dividend hike announcements, of late.
Recently, Omega Healthcare Investors Inc. (OHI) announced a 1.9% hike in its quarterly dividend rate to 53 cents, while Chatham Lodging Trust (CLDT) announced a 25% increase in its monthly dividend rate to 10 cents. Earlier, DDR Corp. (DDR) had announced an 11% rise in its quarterly dividend.
Cousins Properties currently carries a Zacks Rank #3 (Hold).
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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