Alexandria Real Estate Equities, Inc. (ARE), a real estate investment trust (:REIT), has recently increased its quarterly dividend from 53 cents to 56 cents per share. This translates to a 5.7% increase from the prior dividend payout. The dividend is payable on January 15, 2013 to shareholders of record on December 31, 2012.
In the past one year period, quarterly dividend increased by 23 cents, or approximately 12% from $1.86 per share in 2011 to $2.09 for 2012.
As of September 30, 2012, the company's funds from operations payout ratio (quarterly common stock dividend divided by quarterly funds from operations) was 50%. At the end of third quarter 2012, cash and cash equivalents stood at $94.9 million. We believe that the company has enough cash to provide optimum shareholder value.
Alexandria Real Estate expects to distribute excess cash to the shareholders through the increased dividend and concurrently look to maintain its cash flow for further reinvestments. 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.
Pasadena, California-based, Alexandria Real Estate is one of the largest owners of life-science related real estate companies in the U.S. The company is focused principally on science-driven cluster development through the ownership, operation, management, and selective acquisition, development, and redevelopment of properties containing life science laboratory space. The company leases the properties mainly to universities, pharmaceutical, medical device, life science product, biotechnology, service, bio-defence, and translational research entities.
Alexandria Real Estate currently has Zacks #4 Rank, which translates into a short-term Sell rating. We have a long-term Neutral recommendation on the stock. One of its competitors, Liberty Property Trust (LRY) holds a Zacks #3 Rank, which translates into a short- term Hold rating.
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