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Ushering in good news for its shareholders, Cousins Properties CUZ recently announced an 8.3% hike in the company's quarterly cash dividend. The company will now pay a dividend of 6.5 cents per share. The raised dividend will be paid on Apr 13, 2018, to shareholders of record as of Apr 3.
Based on the increased rate for the first quarter of 2018, the annual dividend comes to 26 cents a share. At this new rate, annualized yield comes at 2.98% based on the stock’s closing price of $8.70 on Mar 19.
We believe Cousins Properties has adequate capacity to support its enhanced dividend payout. In February, the company reported fourth-quarter 2017 FFO per share of 15 cents, surpassing the Zacks Consensus Estimate by a penny. Further, the figure compared favorably with 7 cents recorded in the year-ago period.
Quarterly results at this real estate investment trust (REIT) reflected a rise in second-generation net rent per square foot on a cash basis.
Notably, Cousins Properties’ diversified portfolio, presence of high-end tenants in its roster, opportunistic investments in best sub-markets and a conservative balance sheet keeps the growth momentum going. As such, the company remains well poised to boost shareholders’ wealth.
However, the company faces stiff competition from other market players. This impacts its ability to retain and attract tenants at higher rents. Further, rising supply of office space and hike in interest rates remain concerns.
In fact, solid dividend payouts remain arguably the biggest attraction for REIT investors as the U.S. law requires these companies to distribute 90% of the annual taxable income in the form of dividends to shareholders. Apart from Cousins Properties, some other REITs, which announced dividend hikes in recent months are Equity Residential EQR, Digital Realty DLR and Prologis Inc. PLD.
Cousins Properties' shares have dropped 5% in the past three months, against the 5.4% loss incurred by the industry it belongs to.
Cousins Properties currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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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