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Analyst Blog

Education Realty Trust, Inc. (EDR - Snapshot Report), a real estate investment trust (REIT), has recently increased its quarterly dividend by 42.9% from 7 cents to 10 cents per share. The current dividend payout equates to 40 cents per share on an annualized basis, and affirms a yield of 3.4%. The dividend is payable on August 15, 2012 to shareholders of record as on July 31, 2012.

Education Realty has increased its quarterly dividend twice since 2010. The present dividend rate has also surged by 100% during the same time period.

A steady dividend payout facilitates the long-term strategy of Education Realty to provide attractive risk-adjusted returns to its stockholders. The company has 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 Education Realty. 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.

Education Realty is one of the leading REITs in the U.S., with expertise in university town housing. The company presently owns or manages 60 communities in 23 states with over 34,200 beds in more than 11,100 units.

We have a Neutral recommendation on Education Realty, which currently has a Zacks #3 Rank that translates into a short-term Hold rating and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1–3 months. We also have a Neutral recommendation and a Zacks #3 Rank for American Campus Communities Inc. (ACC - Snapshot Report), a competitor of Education Realty.

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