CubeSmart (CUBE), a real estate investment trust (REIT), has recently increased its quarterly dividend from 8 cents to 11 cents per share. This translates to a 37.5% increase from the prior-year dividend payout. The dividend is payable on January 15, 2013 to shareholders of record on January 1.
As a result of this revision, CubeSmart is bringing its annualized dividend to 44 cents from 32 cents per share. At the end of third quarter 2012, cash and cash equivalents stood at $2.7 million. We believe that the company has enough cash to provide optimum shareholder value.
CubeSmart expects to distribute its excess cash to shareholders through the increased dividend and concurrently look to maintain its cash flow for further reinvestment. Solid dividend payouts are arguably the best enticement for REIT investors as U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividend to shareholders.
Founded in 2004, CubeSmart along with its subsidiaries owns, operates, acquires and develops self-storage facilities and CubeSmart Network in the United States. Currently, it owns 508 self-storage facilities and around 800 additional self-storage facilities, under the CubeSmart Network. The company's self-storage facilities are designed to offer easily accessible and secure storage space for residential and commercial customers
CubeSmart currently has Zacks #3 Rank, which translates into a short-term Hold rating. We have a long-term Neutral recommendation on the stock. One of its competitors, Public Storage (PSA), holds a Zacks #2 Rank, which translates into a short- term Buy rating.