Investors are always happy when a company they own increases its dividend. After all, as an income investor, you just got a raise.
But hikes often mean more than generous company. Dividend increases may also indicate that the company believes its future earnings will be sufficient to cover the increase granted to its shareholders.
This is especially true for real estate investment trusts (REITs) which are required by law to pay out a minimum of 90% of their taxable income as dividends to shareholders. A dividend hike can be an indirect way to let shareholders know that their taxable income may soon increase.
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Take a look at three REITs that announced dividend hikes this week:
Essential Properties Real Estate Trust Inc. (NYSE: EPRT) is a Princeton, New Jersey-based diversified REIT that owns and manages single-tenant properties with net leases for service-oriented, experience-based businesses. Essential Properties was founded in 2016 and has a market cap of $3.68 billion. He has a portfolio of 1,688 properties in 48 states. Its properties have an occupancy rate of 99.8%.
On April 26, Essential Properties announced its first quarter operating results. Adjusted funds from operations (AFFO) of $0.40 was in line with estimates. Revenue of $83.69 million exceeded estimates of $4.63 million and was 19.4% higher than Q1 2022 revenue. In addition, Essential Properties raised its previous AFFO guidance for 2023 d a range of $1.58 to $1.64 to $1.60 to $1.64 per share.
On June 12, Essential Properties also announced an increase in its quarterly dividend from $0.275 to $0.28 per share. The dividend is payable on July 14 to shareholders of record on June 30. The annual dividend of $1.12 per share yields 4.57%. The payout ratio is moderate at 66%.
Realty Income Corp. (NYSE:O) is a San Diego-based triple net REIT with more than 12,400 properties worldwide. The “Monthly Dividend Company”, as it is widely known, is a member of the S&P 500 and an S&P 500 Dividend Aristocrat, with 635 consecutive monthly dividends paid and 121 dividend increases since 1994. It is one of the REITs most popular among investors. Today.
Funds from operations (FFO) of $1.04 per share beat both estimates and the first quarter 2022 FFO of $0.03 per share. Revenue of $944.39 million beat estimates of $61.31 million and was 17% higher than its revenue of $643.26 million in Q1 2022.
Realty Income also raised its full-year 2023 forecast for FFO per share from $4.01 to $4.03 to $4.05 to $4.15 and said it ended the first quarter with a rate of 99% occupancy. Numbers like this explain why Realty Income is able to increase its dividend so frequently.
On June 13, Realty Income announced an increase in its monthly dividend from $0.255 to $0.2555 per share. The forward yield is now 5.01%. The dividend is payable on July 14 for shareholders of record on July 3. The ex-dividend date is June 30.
Host Hotels & Resorts Inc. (NYSE: HST) is a hotel REIT in Bethesda, Maryland that calls itself “the world’s largest lodging REIT.” It is an S&P 500 company that owns and operates 41,900 rooms in 77 hotels in 20 of the largest US markets and five other hotels in Canada and Brazil. It was established in 1993 and has a market capitalization rate of $11.9 billion.
Most Host Hotels properties are upscale and luxury hotels located in central business districts, conveniently located near airports. Hotels typically include amenities such as restaurants and lounges, swimming pools, exercise facilities, and gift shops. Of its 78 hotels, 28 contain more than 500 rooms.
On May 3, Host Hotels & Resorts announced its first quarter operating results. FFO of $0.54 exceeded the estimate of $0.06 and was 41.03% higher than earnings of $0.39 per share in the first quarter of 2022. Revenue of $1.38 billion exceeded the estimate of $1.31 billion and was 28.58% higher than revenue of $1.07 billion in the first quarter of 2022. 2022.
On the heels of improving earnings, Host Hotels & Resorts on June 14 announced a 25% increase in its second-quarter dividend, from $0.12 to $0.15 per share. The forward annual dividend of $0.60 now yields 3.43%, and the payout ratio for funds from operations is still very reasonable at 31.4%.
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This article 3 REITs that just raised dividends originally appeared on Benzinga.com
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