Last week, Vornado Realty Trust ( VNO - Analyst Report ) – a leading real estate investment trust (REIT) – hiked its quarterly dividend substantially from 36 cents to 73 cents. The new dividend is payable on Feb 19, 2013 to stockholders of record as of Jan 28, 2013.

This represents Vornado’s second dividend increase since Sep 2012. If the current dividend is maintained for the remainder of the year, the annualized dividend payout of the company would be $2.92 per share.

This dividend hike reflects the company’s continued robust performance, backed by disciplined acquisition policy and a diligent execution of its strategic plan. Based on the closing price of $84.63 as on Jan18, 2012, the proposed annual dividend affirms a yield of 3.45%. A steady dividend payout facilitates the long-term strategy of Vornado to provide attractive risk-adjusted returns to its stockholders.

Lately, a number of REIT firms have been observed increasing their dividend payouts. Earlier this month, one of Vornado’s peers – DDR Corp. ( DDR - Analyst Report ) – hiked its quarterly dividend by about 12.5% to 13.5 cents.

Last year, Host Hotels & Resorts, Inc. ( HST - Analyst Report ) – the largest lodging REIT – increased its fourth-quarter dividend payout by 80% year over year to 9 cents per. Another Lodging REIT, RLJ Lodging Trust ( RLJ - Snapshot Report ) , also increased its quarterly dividend by 24.0% to 20.5 cents per share.

Solid dividend payouts are arguably the biggest enticement for REIT investors as the U.S. law requires these to distribute 90% of their annual taxable income in the form of dividends to the shareholders.

We are impressed with the company’s dedication towards continuously enhancing the shareholders’ value. Vornado has long been focusing on increasing its ownership stake in upscale properties and acquiring premium assets. These efforts have enabled the company to strengthen the balance sheet and generate considerable cash flow for portfolio enhancement as well as increase the cash distribution to its shareholders.

Vornado currently carries a Zacks Rank #3 (Hold).