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Phillips Edison (PECO) Rewards Investors With 4.5% Dividend Hike
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Boosting its shareholders’ wealth, Phillips Edison & Company, Inc. (PECO - Free Report) recently announced a 4.5% increase in its monthly cash dividend to 9.75 cents per share from 9.33 cents per share paid out earlier.
The increased dividend for the months of October and November will be paid out on Oct 2 and Nov 1 to common stockholders on record as of Sep 15 and Oct 16, respectively. The latest dividend rate marks an annualized amount of $1.17 per share compared with the previous rate of $1.12 per share.
Post this dividend hike, PECO’s annual dividend yield now comes to 3.43% based on the company’s share price of $34.06 on Sep 5, 2023.
Solid dividend payouts are the biggest enticements for real estate investment trust (REIT) investors, and Phillips Edison has remained committed to that even during the pandemic. Notably, the company has increased its dividend three times in the last five years and has a five-year annualized dividend growth rate of 4.86%. Check Phillips Edison & Company’s dividend history here.
Per Jeff Edison, Chairman and Chief Executive Officer of PECO, “The continued strength of our operating performance and growth of our cash flows allow us to increase our monthly dividend distribution once again. This increase is attributed to the success of our differentiated and focused strategy of exclusively owning grocery-anchored neighborhood shopping centers anchored by the #1 or #2 grocer in a market and our ability to drive results at the property level through our integrated and cycle-tested operating platform.”
Phillips Edison is one of the United States’ largest owners and operators of omnichannel grocery-anchored shopping centers with a key presence in the high-growth Sun Belt region. In the second quarter of 2023, the company derived 97% of its annual base rent (ABR) from omnichannel grocery-anchored neighborhood centers.
The company also enjoys a solid tenant base. Its top grocery anchors include industry bellwethers like Kroger, Publix, Albertsons and Ahold Delhaize. As of Jun 30, 2023, necessity-based goods and services retailers accounted for 71% of PECO’ ABR.
Moreover, its centers feature a mix of national (74% of annual base rent as of Jun 30, 2023) and regional (26%) retailers providing necessity-based goods and services in the fundamentally strong markets throughout the United States. This encouraging tenant mix is likely to help the company to generate steady rental revenues over time.
In addition, PECO maintains a healthy balance sheet position and exited the second quarter of 2023 with $629 million of liquidity and a net debt to adjusted EBITDA of 5.2X. Its credit ratings of Baa3 (Stable) and BBB- (Stable) from Moody’s and Standard & Poor’s, respectively, enable it to procure debt financing at attractive costs.
Hence, with a solid operating platform, a lower payout ratio compared with the industry and a robust financial position, we expect the company’s latest dividend rate to be sustainable.
Analysts seem bullish on this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for its ongoing year’s funds from operations (FFO) per share has been revised marginally upward over the past two months to $2.32.
Shares of the company have gained 5.7% in the past three months against the industry's 0.5% fall.
The Zacks Consensus Estimate for Tanger Factory Outlet Centers’ current-year FFO per share has been raised marginally in the past month to $1.88.
The consensus estimate for Acadia Realty Trust’s 2023 FFO per share has moved 3.3% upward in the past month to $1.27.
The Zacks Consensus Estimate for Saul Centers’ ongoing year’s FFO per share has been revised 2.3% northward in the past month to $3.12.
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.
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Phillips Edison (PECO) Rewards Investors With 4.5% Dividend Hike
Boosting its shareholders’ wealth, Phillips Edison & Company, Inc. (PECO - Free Report) recently announced a 4.5% increase in its monthly cash dividend to 9.75 cents per share from 9.33 cents per share paid out earlier.
The increased dividend for the months of October and November will be paid out on Oct 2 and Nov 1 to common stockholders on record as of Sep 15 and Oct 16, respectively. The latest dividend rate marks an annualized amount of $1.17 per share compared with the previous rate of $1.12 per share.
Post this dividend hike, PECO’s annual dividend yield now comes to 3.43% based on the company’s share price of $34.06 on Sep 5, 2023.
Solid dividend payouts are the biggest enticements for real estate investment trust (REIT) investors, and Phillips Edison has remained committed to that even during the pandemic. Notably, the company has increased its dividend three times in the last five years and has a five-year annualized dividend growth rate of 4.86%. Check Phillips Edison & Company’s dividend history here.
Per Jeff Edison, Chairman and Chief Executive Officer of PECO, “The continued strength of our operating performance and growth of our cash flows allow us to increase our monthly dividend distribution once again. This increase is attributed to the success of our differentiated and focused strategy of exclusively owning grocery-anchored neighborhood shopping centers anchored by the #1 or #2 grocer in a market and our ability to drive results at the property level through our integrated and cycle-tested operating platform.”
Phillips Edison is one of the United States’ largest owners and operators of omnichannel grocery-anchored shopping centers with a key presence in the high-growth Sun Belt region. In the second quarter of 2023, the company derived 97% of its annual base rent (ABR) from omnichannel grocery-anchored neighborhood centers.
The company also enjoys a solid tenant base. Its top grocery anchors include industry bellwethers like Kroger, Publix, Albertsons and Ahold Delhaize. As of Jun 30, 2023, necessity-based goods and services retailers accounted for 71% of PECO’ ABR.
Moreover, its centers feature a mix of national (74% of annual base rent as of Jun 30, 2023) and regional (26%) retailers providing necessity-based goods and services in the fundamentally strong markets throughout the United States. This encouraging tenant mix is likely to help the company to generate steady rental revenues over time.
In addition, PECO maintains a healthy balance sheet position and exited the second quarter of 2023 with $629 million of liquidity and a net debt to adjusted EBITDA of 5.2X. Its credit ratings of Baa3 (Stable) and BBB- (Stable) from Moody’s and Standard & Poor’s, respectively, enable it to procure debt financing at attractive costs.
Hence, with a solid operating platform, a lower payout ratio compared with the industry and a robust financial position, we expect the company’s latest dividend rate to be sustainable.
Analysts seem bullish on this Zacks Rank #2 (Buy) company. The Zacks Consensus Estimate for its ongoing year’s funds from operations (FFO) per share has been revised marginally upward over the past two months to $2.32.
Shares of the company have gained 5.7% in the past three months against the industry's 0.5% fall.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the retail REIT sector are Tanger Factory Outlet Centers (SKT - Free Report) , Acadia Realty Trust (AKR - Free Report) and Saul Centers (BFS - Free Report) , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Tanger Factory Outlet Centers’ current-year FFO per share has been raised marginally in the past month to $1.88.
The consensus estimate for Acadia Realty Trust’s 2023 FFO per share has moved 3.3% upward in the past month to $1.27.
The Zacks Consensus Estimate for Saul Centers’ ongoing year’s FFO per share has been revised 2.3% northward in the past month to $3.12.
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.