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Hersha Hospitality (HT) Declares Special Cash Dividend
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Hersha Hospitality Trust declared a special cash dividend of 20 cents per share. This is in addition to the company’s regular cash dividend of 28 cents per share. The company will pay these common share dividends and limited partnership unit distributions on Jan 17, 2017 to holders of record as of Jan 5, 2017.
Usually, special dividends are paid by REITs on capital gains from the sale of assets to avoid paying taxes. Notably, solid dividend payouts remain arguably the biggest enticement for REIT investors as the U.S. law requires these companies to distribute at least 90% of their taxable income to shareholders, annually, in the form of dividends.
Amid an increased interest from international and domestic investors in the current year for solid cash flow generating real estate in U.S. gateway and suburban markets, the company opted for transformative asset sales. In fact, it expects to have achieved disposition of 16 stabilized hotels by early 2017, for a total of over $825 million, reaping around $550 million in net proceeds.
Specifically, the company experienced about $268 million of taxable gains in 2016 from its assets sales. Hence, comes the decision to roll out this special dividend. The company also reemployed the capital in thriving hotels situated in the coastal gateway markets.
Notably, this hotel REIT has exceeded estimates in three of the trailing four quarters, with an average beat of 6.9%. The company is well poised to grow and benefit shareholders accordingly. In fact, it has a growth rate of 6.5% for the next five years, against the industry average of 5.7%.
Hersha Hospitality is not the only REIT declaring special dividend of late. In fact, recently General Growth Properties, Inc. declared a special cash dividend of 26 cents per share, payable on Jan 27, 2017, to shareholders of record as of Dec 27, 2016. This is in addition to the fourth-quarter cash dividend of 22 cents, slated to be paid on Jan 6, 2017, to stockholders of record as of Dec 15, 2016.
The other REIT – Highwoods Properties, Inc. (HIW - Free Report) – came up with a special dividend announcement of 80 cents per share, which is payable on Jan 10, 2017 to shareholders of record as of Dec 27, 2016. This is primarily the outcome of the distribution of the taxable capital gains related to the sales of its Country Club Plaza assets earlier in 2016. Highwoods also pays a quarterly common stock cash dividend of 42.5 cents per share.
Moreover, Kilroy Realty Corp. (KRC - Free Report) declared a special cash dividend of $1.90 per share, which is due to the distribution of taxable income, mainly associated with gains from the sale of real estate property in 2016. The company will pay the dividend on Jan 13, 2017 to shareholders of record as of Dec 30, 2016. Kilroy Realty will also pay a regular quarterly dividend of 37.5 cents per share.
Currently, Hersha Hospitality, Highwoods Properties and Kilroy Realty carry a Zacks Rank #3 (Hold). However, General Growth has a Zacks Rank #4 (Sell).
Shares of Hersha Hospitality have outperformed the Zacks categorized REIT – Equity Trust – Other industry in the past one month. Hersha Hospitality’s shares have logged in a return of 9.7%, against the industry’s gain of 4.9%.
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Hersha Hospitality (HT) Declares Special Cash Dividend
Hersha Hospitality Trust declared a special cash dividend of 20 cents per share. This is in addition to the company’s regular cash dividend of 28 cents per share. The company will pay these common share dividends and limited partnership unit distributions on Jan 17, 2017 to holders of record as of Jan 5, 2017.
Usually, special dividends are paid by REITs on capital gains from the sale of assets to avoid paying taxes. Notably, solid dividend payouts remain arguably the biggest enticement for REIT investors as the U.S. law requires these companies to distribute at least 90% of their taxable income to shareholders, annually, in the form of dividends.
Amid an increased interest from international and domestic investors in the current year for solid cash flow generating real estate in U.S. gateway and suburban markets, the company opted for transformative asset sales. In fact, it expects to have achieved disposition of 16 stabilized hotels by early 2017, for a total of over $825 million, reaping around $550 million in net proceeds.
Specifically, the company experienced about $268 million of taxable gains in 2016 from its assets sales. Hence, comes the decision to roll out this special dividend. The company also reemployed the capital in thriving hotels situated in the coastal gateway markets.
Notably, this hotel REIT has exceeded estimates in three of the trailing four quarters, with an average beat of 6.9%. The company is well poised to grow and benefit shareholders accordingly. In fact, it has a growth rate of 6.5% for the next five years, against the industry average of 5.7%.
Hersha Hospitality is not the only REIT declaring special dividend of late. In fact, recently General Growth Properties, Inc. declared a special cash dividend of 26 cents per share, payable on Jan 27, 2017, to shareholders of record as of Dec 27, 2016. This is in addition to the fourth-quarter cash dividend of 22 cents, slated to be paid on Jan 6, 2017, to stockholders of record as of Dec 15, 2016.
The other REIT – Highwoods Properties, Inc. (HIW - Free Report) – came up with a special dividend announcement of 80 cents per share, which is payable on Jan 10, 2017 to shareholders of record as of Dec 27, 2016. This is primarily the outcome of the distribution of the taxable capital gains related to the sales of its Country Club Plaza assets earlier in 2016. Highwoods also pays a quarterly common stock cash dividend of 42.5 cents per share.
Moreover, Kilroy Realty Corp. (KRC - Free Report) declared a special cash dividend of $1.90 per share, which is due to the distribution of taxable income, mainly associated with gains from the sale of real estate property in 2016. The company will pay the dividend on Jan 13, 2017 to shareholders of record as of Dec 30, 2016. Kilroy Realty will also pay a regular quarterly dividend of 37.5 cents per share.
Currently, Hersha Hospitality, Highwoods Properties and Kilroy Realty carry a Zacks Rank #3 (Hold). However, General Growth has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Hersha Hospitality have outperformed the Zacks categorized REIT – Equity Trust – Other industry in the past one month. Hersha Hospitality’s shares have logged in a return of 9.7%, against the industry’s gain of 4.9%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>