Highwoods Properties Inc. (HIW - Analyst Report), a real estate investment trust (REIT), has recently declared a quarterly dividend of 42.5 cents per share or $1.70 on an annualized basis for the first quarter of 2012. The dividend is payable in cash on June 12, 2012 to shareholders of record as on May 21, 2012.
A steady dividend payout facilitates the long-term strategy of Highwoods to provide attractive risk-adjusted returns to its stockholders. The company has also historically promulgated a dividend reinvestment and direct stock purchase plan through which stockholders may purchase additional shares of the company by reinvesting some or all of the cash dividends received on the common shares.
Investors looking for high dividend yields are increasingly favoring REITs like Highwoods. Solid dividend payouts are arguably the biggest enticement for REIT investors as the U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends to shareholders. Highwoods expects to fund its dividend payout by utilizing cash flows from its operating activities.
Based in Raleigh, North Carolina, Highwoods owns and operates its properties through its wholly-owned subsidiary Highwoods Realty Limited Partnerships. The company owns office, industrial, retail, and service center properties, including development projects and apartment units across the U.S. It also provides customer-related and fee-based real estate management services for its properties as well as for third-party clients.
Highwoods is one of the biggest owners and operators of suburban office, industrial and retail properties in the Southeastern and Midwestern U.S., providing a complete line of real estate services to its customers and third parties through a fully-integrated organization. The core markets of the company include Florida, Georgia, Iowa, Maryland, Missouri, Mississippi, North Carolina, South Carolina, Tennessee and Virginia.
The company is presently repositioning its portfolio to focus on stronger long-term markets and newer assets. A large part of the company’s portfolio is now concentrated in the high-growth Sun Belt markets, which provide above-average job growth owing to its long-term demographic trends.
We maintain our long-term Neutral recommendation on Highwoods, which currently retains a Zacks #3 Rank that translates into a short-term Hold rating. We also have a Neutral recommendation and a Zacks #3 Rank for Cousins Properties Inc. (CUZ - Analyst Report), one of the competitors of Highwoods.