Earlier this week, Campus Crest Communities Inc. ( CCG - Snapshot Report ) – a real estate investment trust (REIT) – announced a 3.1% hike in its annual cash dividend rate. The company will now pay a dividend of 66 cents per share annually compared with the prior rate of 64 cents.

It will become effective from first quarter 2013 and the quarterly dividend rate will amount to 16.5 cents. The increased dividend will be paid on Apr 10, 2013 to stockholders of record on Mar 27.

Based on the closing price of $12.08 on Jan 31, 2013, the proposed annual dividend affirms a yield of 5.5%. It is backed by the company’s solid operating platform and strategic measures to help improve its top line.

Campus Crest, which currently owns interests in 39 operating student housing properties containing approximately 20,884 beds, plans to deliver 6 projects containing approximately 3,564 beds in the third quarter of 2013. We believe that with its decent fundamentals, the company is well poised to maintain its growth curve and concurrently add to shareholders wealth through steady dividend hikes.

Campus Crest is a developer, builder, owner and manager of high-quality, purpose-built student housing properties located close to campuses in targeted U.S. markets.
The company rents student housing properties, offers student housing services and provides construction, development and management services.

With this dividend hike, Campus Crest joined a host of REITs that have recently increased their dividend payments. This includes Vornado Realty Trust ( VNO - Analyst Report ) , DDR Corp. ( DDR - Analyst Report ) as well as lodging REIT, RLJ Lodging Trust ( RLJ - Snapshot Report ) that have raised their dividend in the last two months.

U.S. law requires REIT companies to distribute 90% of their annual taxable income in the form of dividends to the shareholders and therefore, solid dividend payouts are a significant attraction for REIT investors. Also, Campus Crest currently carries a Zacks Rank #2 (Buy).