On Monday, Alexandria Real Estate Equities, Inc. (ARE), the Pasadena, CA-based real estate investment trust (:REIT), announced a cash dividend of 72 cents per common share for second-quarter 2014. The dividend will be payable on Jul 15, to shareholders of record on Jun 30. This marks a 3.0% hike from 70 cents per common share paid to the shareholders on Apr 15, 2014 and an attractive 11.0% increase from 65 cents paid in second-quarter 2013.
The dividend hike is in line with Alexandria Real Estate Equities’ efforts to distribute its strong cash flows from operations to its common shareholders. It also utilizes the cash flows for reinvestment purposes. In first-quarter 2014, the company recorded net operating income of $123.7 million, a 17.9% increase from the prior-year quarter. Given its financial strength, it will not be difficult for Alexandria Real Estate Equities to make the payments.
Again, the company’s funds from operations payout ratio (which is calculated by dividing the quarterly common stock dividend by quarterly funds from operations) remains favorably low at 60% as of Mar 31, 2014. It implies further potential of the company to raise the quarterly cash dividend per common share.
Alexandria Real Estate Equities is engaged in the ownership, operation, management, development, acquisition and selective redevelopment of properties for the life-science industry. As of Mar 31, 2014, the company had total assets worth 7.8 billion, up 9.4% from the year-ago quarter. Total revenue for this equity-REIT in the quarter was $176.2 million, rising 17.4% from the prior-year quarter.
Alexandria Real Estate Equities currently carries a Zacks Rank #3 (Hold). Some better-ranked equity REITs include The GEO Group, Inc. (GEO), Terreno Realty Corp. (TRNO) and Aviv REIT, Inc. (AVIV). All these stocks sport a Zacks Rank #1 (Strong Buy).