We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Alexandria (ARE) Rewards Investors, Hikes Dividend by 2.5%
Read MoreHide Full Article
Alexandria Real Estate Equities, Inc. (ARE - Free Report) announced a 2.5% sequential hike in its fourth-quarter 2022 cash dividend payout. Delighting its shareholders, the company will now pay out a dividend of $1.21 per share, up from the $1.18 paid in the third quarter. The increased dividend will be paid out on Jan 13, 2023 to shareholders on record as of Dec 30, 2022.
Based on the increased rate, the annual dividend comes to $4.84 per share. This results in an annualized yield of about 3.2%, considering Alexandria’s closing price of $150.58 on Dec 5. For the year ending Dec 31, 2022, the common stock dividend marks an increase of 24 cents or 5% year over year.
Solid dividend payouts are arguably the biggest enticements for real estate investment trust investors, and Alexandria remains committed to that. It has increased its dividend 11 times in the last five years, and the five-year annualized dividend growth rate is 6.11%. This is attractive to income investors and represents a steady income stream. Check Alexandria’s dividend history here.
Can Alexandria Maintain Its Payout?
Alexandria operates its business in highly concentrated urban campuses, which have high barriers to entry and a limited supply of available space. It focuses on Class A properties concentrated in urban campuses, primarily for life science and technology entities.
In the third quarter of 2022, investment-grade or publicly-traded large-cap tenants accounted for 49% of annual rental revenues in effect. The weighted-average remaining lease term of all tenants is 7.2 years. For Alexandria’s top 20 tenants, it is 9.7 years. This ensures steady rental revenues for ARE.
The high demand for Class A properties in AAA locations is boosting the level of occupancy and driving growth in rents. The company is witnessing strong demand for space in key life science markets.
The occupancy of operating properties in North America remained high at 94.3% as of Sep 30, 2022. Excluding vacancies at the recently acquired properties, the occupancy was 98.4%. Such a high level of occupancy is anticipated to continue in the upcoming quarters as well and support rent growth.
Moreover, Alexandria has adequate financial flexibility to enhance its market position and capitalize on long-term growth opportunities. The company had $6.4 billion of liquidity as of the end of the third quarter. It has no debt maturities before 2025. The weighted-average remaining term of debt as of Sep 30, 2022 was 13.2 years.
For the 10-year period ending Dec 31, 2022, Alexandria estimates a total of $2.0 billion in cash flows from operating activities after dividends will have been generated for reinvestment.
Moreover, Alexandria’s current payout ratio is 56.49%, lower than the industry’s average of 66.29%. Looking at the company’s solid operating platform, balance sheet strength, ability to generate cash flows and payout ratio, it is likely to be able to sustain the hiked dividend.
Some better-ranked stocks from the REIT sector are VICI Properties Inc. (VICI - Free Report) and Lamar Advertising Company (LAMR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for VICI Properties’ fourth-quarter 2022 FFO per share has moved marginally north to 51 cents over the past two months.
The Zacks Consensus Estimate for Lamar Advertising Company’s ongoing year’s FFO per share has been raised 1.4% over the past month to $7.34.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Alexandria (ARE) Rewards Investors, Hikes Dividend by 2.5%
Alexandria Real Estate Equities, Inc. (ARE - Free Report) announced a 2.5% sequential hike in its fourth-quarter 2022 cash dividend payout. Delighting its shareholders, the company will now pay out a dividend of $1.21 per share, up from the $1.18 paid in the third quarter. The increased dividend will be paid out on Jan 13, 2023 to shareholders on record as of Dec 30, 2022.
Based on the increased rate, the annual dividend comes to $4.84 per share. This results in an annualized yield of about 3.2%, considering Alexandria’s closing price of $150.58 on Dec 5. For the year ending Dec 31, 2022, the common stock dividend marks an increase of 24 cents or 5% year over year.
Solid dividend payouts are arguably the biggest enticements for real estate investment trust investors, and Alexandria remains committed to that. It has increased its dividend 11 times in the last five years, and the five-year annualized dividend growth rate is 6.11%. This is attractive to income investors and represents a steady income stream. Check Alexandria’s dividend history here.
Can Alexandria Maintain Its Payout?
Alexandria operates its business in highly concentrated urban campuses, which have high barriers to entry and a limited supply of available space. It focuses on Class A properties concentrated in urban campuses, primarily for life science and technology entities.
In the third quarter of 2022, investment-grade or publicly-traded large-cap tenants accounted for 49% of annual rental revenues in effect. The weighted-average remaining lease term of all tenants is 7.2 years. For Alexandria’s top 20 tenants, it is 9.7 years. This ensures steady rental revenues for ARE.
The high demand for Class A properties in AAA locations is boosting the level of occupancy and driving growth in rents. The company is witnessing strong demand for space in key life science markets.
The occupancy of operating properties in North America remained high at 94.3% as of Sep 30, 2022. Excluding vacancies at the recently acquired properties, the occupancy was 98.4%. Such a high level of occupancy is anticipated to continue in the upcoming quarters as well and support rent growth.
Moreover, Alexandria has adequate financial flexibility to enhance its market position and capitalize on long-term growth opportunities. The company had $6.4 billion of liquidity as of the end of the third quarter. It has no debt maturities before 2025. The weighted-average remaining term of debt as of Sep 30, 2022 was 13.2 years.
For the 10-year period ending Dec 31, 2022, Alexandria estimates a total of $2.0 billion in cash flows from operating activities after dividends will have been generated for reinvestment.
Moreover, Alexandria’s current payout ratio is 56.49%, lower than the industry’s average of 66.29%. Looking at the company’s solid operating platform, balance sheet strength, ability to generate cash flows and payout ratio, it is likely to be able to sustain the hiked dividend.
This Zacks Rank #3 (Hold) stock has risen 7.4% so far in the quarter, marginally underperforming the industry’s growth of 7.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the REIT sector are VICI Properties Inc. (VICI - Free Report) and Lamar Advertising Company (LAMR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for VICI Properties’ fourth-quarter 2022 FFO per share has moved marginally north to 51 cents over the past two months.
The Zacks Consensus Estimate for Lamar Advertising Company’s ongoing year’s FFO per share has been raised 1.4% over the past month to $7.34.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.