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Analyst Blog

Education Realty Trust, Inc. (EDR - Snapshot Report) recently hiked its quarterly cash dividend by 2 cents to 7 cents per share. This translates into a massive 40% increase from the prior dividend. The increased dividend will be paid on August 16, 2011, to stockholders of record as on June 29, 2011. This takes the annual dividend yield as of June 23, 2011, to 3.4%.

With this dividend increase, the annualized dividend of $ 0.28 per share represents approximately 70% of the previously issued 2011 core funds from operations guidance which is in the range of $ 0.38 to $ 0.42 per share.

Funds from operations, 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.

During the first quarter 2011 FFO (funds from operations) stood at $9.4 million or 13 cents per share, compared to $8 million or 14 cents per share in the year-earlier quarter.

At the end of first quarter 2011, Education Realty cash balance stood at $75.6 million.  We believe the company has enough cash and cash equivalents to provide optimum shareholder value.

Education Realty is a real estate investment trust (REIT) that develops, acquires, owns, and manages student housing communities located near university campuses in the United States. It manages 57 communities in 23 states with more than 33,800 beds in more than 10,600 units.

Education Realty currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, American Campus Communities Inc (ACC - Snapshot Report) currently retains a Zacks #3 Rank which translates into a short term Hold rating.

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