Boston Properties, Inc. BXP has announced a 3% sequential hike in quarterly cash dividend. The company will now pay a dividend of 98 cents per share, up from the 95 cents in the prior quarter. The increased dividend will be paid out on Jan 30, 2020, to shareholders of record as on Dec 31, 2019.
The latest dividend rate marks an annualized amount of $3.92 per share. Based on the company’s share price of $134.47 on Dec 17, it results in a dividend yield of 2.9%.
Income seeking investors are always on the lookout for companies with a track record of consistent and incremental dividend payments. Moreover, solid dividend payouts are arguably the biggest enticement for REIT investors, and Boston Properties remains committed to it. In fact, with the latest hike, the company’s total common stock dividend for 2019 comes to $3.83 a share, denoting an increase of 9% from the prior-year payout. It also marks 42% increase over the past three years.
The latest hike reflects Boston Properties' ability to generate solid cash flow growth through its operating platform. The company’s high-quality properties in select high-rent, high barrier-to-entry geographic markets enable it to enjoy strong leasing volumes amid a healthy job market environment, which supports its profitability. Also, its focus on opportunistic acquisitions and development projects are expected to contribute to cash flow over the long term.
Additionally, Boston Properties depicts robust funds from operations (FFO) picture. In the past three to five years, this office REIT’s FFO per share witnessed growth of 5.2%. Also, its FFO is projected to grow at a rate of 11% for the current year. The Zacks Consensus Estimate for 2019 FFO per share of $6.99 has jumped marginally in the past 30 days.
Further, total revenues have witnessed a CAGR of 4.9% over the past five years. Also, the company exited third-quarter 2019 with cash and cash equivalents of $751.2 million, up from $543.3 million as of Dec 31, 2018. Hence, given the company’s solid financial position, its dividend payout rate seems sustainable.
Over the past three months, shares of this Zacks Rank #3 (Hold) company have gained 3.4% against the industry’s decline of 4.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some other stocks from the REIT space that have also announced hike in the dividend payments recently are Agree Realty Corporation ADC, American Tower Corporation AMT and Alexandria Real Estate Equities ARE. While Agree Realty increased the amount by 2.6% sequentially, American Tower announced a hike of 6.3%. Alexandria announced a 3% sequential hike to boost shareholder wealth.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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