3 REITs That Recently Announced Dividend Increases After Beating Estimates
Investors love dividend increases for two reasons. The first is obvious: Dividend increases put more money in their pockets in future quarters. The second is that dividend increases are the company's way of expressing confidence in its ability to continue maintaining or growing earnings going forward.
But the icing on the cake for investors is when a company simultaneously announces earnings that beat analyst estimates and a dividend increase. Take a look at three real estate investment trusts (REITs) that recently proclaimed this dual achievement.
Getty Realty Corp. (NYSE:GTY) is a Jericho, New York-based retail REIT that specializes in owning, leasing and financing 1,080 free-standing auto-related properties across 40 states and Washington, D.C.
Gas stations and convenience stores account for 68% of Getty Realty's properties. Another 17% are car washes, and the remainder are automotive repair shops, auto service and auto parts stores. At the end of the third quarter, its property occupancy rate was 99.7%.
On Oct. 25, Getty Realty announced its third-quarter operating results. Funds from operations (FFO) of $0.57 per share beat the estimates of $0.53 per share and was ahead of FFO of $0.54 in the third quarter of 2022. Revenue of $50.49 million beat the estimate of $44.96 million and was a 20.3% increase over revenue of $41.97 million in the third quarter of 2022.
The same day, Getty Realty announced an increase in its quarterly dividend of 4.7% from $0.43 per share to $0.45 per share payable on Jan. 11 to shareholders of record on Dec. 28. The ex-dividend date is Dec. 27 and the annual dividend of $1.80 per share now yields 6.77%.
On Oct. 19, JMP Securities analyst Mitch Germain maintained a Market Outperform rating on Getty Realty but lowered his price target from $39 to $33.
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Equinix Inc. (NASDAQ:EQIX) is a specialized data center REIT that owns and operates a network of over 250 data centers across 71 major metropolitan areas, providing critical infrastructure to over 10,000 customers and 260 Fortune 500 companies in 32 countries. Equinix has 456,000 total interconnections.
On Oct. 25, Equinix reported its third-quarter operating results. FFO of $5.97 beat the estimates of $5.39 and was a 12.6% increase over FFO of $5.30 in the third quarter of 2022. Revenue of $2.06 billion was in line with estimates but 12% better than revenue of $1.84 billion in the third quarter of 2022.
The same day, Equinix announced a 25% increase to its quarterly dividend from $3.41 to $4.26 per share, payable Dec. 13 to shareholders of record on Nov. 15. The ex-dividend date is Nov. 14, and the $17.04 annual dividend now yields 2.4%.
Kimco Realty Corp. (NYSE:KIM) is a Jericho, New York-based retail REIT that owns and operates 527 open-air, grocery store-anchored and unanchored properties with 90 million square feet of leasable space as well as ground leases. Kimco Realty was founded in 1958, is a member of the S&P 500 and has been publicly traded on the New York Stock Exchange (NYSE) since 1991.
Kimco Realty's lease terms range from less than five years to 30 years or longer. It has over 5,000 different tenants, and only 10 of those tenants have annual base rent (ABR) exposure of over 1%, ensuring tenant diversity for Kimco Realty.
On Oct. 26, Kimco Realty reported third-quarter operating results. FFO of $0.40 per share beat the estimates of $0.39 per share, but FFO fell from $0.41 in the third quarter of 2022. Revenue of $446.07 million beat the estimates of $436.2 and was an increase from revenue of $429.04 in the third quarter of 2022.
At the same time, Kimco Realty announced a 4.3% increase in its quarterly dividend, from $0.23 to $0.24 per share. The dividend is payable on Dec. 21 to shareholders of record on Dec. 7. The ex-dividend date is Dec. 6, and the annual dividend of $0.96 now yields 5.58%.
On Oct. 3, Kimco Realty OP LLC, a subsidiary of Kimco Realty, priced a public offering of $500 million aggregate principal notes at 6.4%, with an effective yield of 6.456%, maturing March 1, 2034.
On Oct. 8, Stifel analyst Simon Yarmak maintained a Buy rating on Kimco Realty and lowered the price target from $23.25 to $22. From a recent closing price of $16.72, that represents a potential 31.5% upside from present value.
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