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UDR Rewards Investors With Sequential Hike in Dividends

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UDR Inc. (UDR - Free Report) announced a sequential hike in its first-quarter 2021 dividend. The company will now pay out a dividend of 36.25 cents per share, marginally up from 36 cents paid out earlier. The increased dividend will be paid out on Apr 30, 2021, to shareholders of record as of Apr 9, 2021.

Based on the hike, the annual dividend has been increased by 1% to $1.45 per share, resulting in an annualized yield of 3.2%, considering UDR’s closing price of $45 on Mar 18.

Solid dividend payouts remain the biggest enticement for investors in real estate investment trusts (“REIT”) and the company remains committed to boosting shareholder wealth. In fact, the first-quarter 2021 dividend will be its 194th consecutive quarterly dividend paid out on its common stock. Also, the company rewarded investors with a 5.1% annualized common dividend hike last year. 

Apart from dividend hikes, the company remains committed to increasing shareholder value through share buybacks. In 2020, UDR repurchased 0.6 million shares of its common stock under its share-repurchase program for total consideration of $19.8 million. Such efforts boost investors’ confidence in the stock. 

Notably, UDR has a geographically diverse portfolio, with superior product-mix of A/B quality properties in urban and suburban markets. The company’s portfolio comprises of properties throughout the United States, including both coastal and Sunbelt locations, with a mix of 37% urban/63% suburban communities.

Given the favorable migration trends that are driving demand in the suburban region, UDR’s suburban communities are expected to outperform its urban communities in terms of occupancy, new lease rate growth, renewal rate growth and traffic in the near term. Also, the decent pace of vaccinations is expected to improve prospects of urban cores and is likely to result in future demand reversion in markets like San Francisco and Manhattan.

Also, as of Dec 31, 2020, it had $958.4 million of liquidity through a combination of cash and undrawn capacity under its credit facilities. This solid financial position helps the company to hike its dividend and enhance shareholder value.

Shares of this Zacks Rank #4 (Sell) company have jumped 40.5% over the past year compared with the industry’s growth of 36.9%.

 

 

Stocks to Consider

Alpine Income Property Trust, Inc.’s (PINE - Free Report) funds from operations (“FFO”) per share estimates for the current year have moved up 9.5% to $1.61 in the past month. The company sports a Zacks Rank of 1 (Strong Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Extra Space Storage Inc.’s (EXR - Free Report) Zacks Consensus Estimate for 2021 FFO per share has moved up 1.3% to $5.97 in the past week. The company currently carries a Zacks Rank of 2 (Buy).

Global Net Lease, Inc. (GNL - Free Report) has a Zacks Rank of 2 at present. The Zacks Consensus Estimate for 2021 FFO per share has been revised 4% at $2.10 in a month’s time.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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