Dividend Coverage: This Diversified REIT with a Dividend Yield of 7.10%; Will Trade Ex-Dividend on July 19, 2017
LONDON, UK / ACCESSWIRE / July 18, 2017 / Pro-Trader Daily takes a closer look at Gladstone Commercial Corp. (NASDAQ: GOOD) as the Company's stock will begin trading ex-dividend on July 19, 2017. In order to capture the dividend payout, investors must purchase the stock one day prior to the ex-dividend date that is by latest at the end of trading session on July 18, 2017. Are you looking for research on dividend stocks, if so register with us now for your free membership at:
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Dividend Declared
On July 11, 2017, Gladstone Commercial announced that its Board of Directors declared $0.125 cash distribution per common share each for the month of July, August, and September 2017. The dividend for July will be paid on July 31, 2017, to shareholders of record as of the close of business on July 21, 2017.
Gladstone Commercial's indicated dividend represents a yield of 7.10%, which is more than double the average dividend yield of 3.24% for the Financial sector. Gladstone Commercial has paid 150 consecutive monthly cash distributions on its common stock. Prior to paying distributions on a monthly basis, the Company paid five consecutive quarterly cash distributions. The Company has never skipped, reduced, or deferred a monthly common stock distribution since inception over 10 years ago.
Dividend Insights
Gladstone Commercial has a dividend payout ratio of 96.8%, which indicates that the Company distributes approximately $0.97 for every $1.00 earned. The dividend payout ratio reflects how much money a Company is returning to shareholders versus how much money it is keeping on hand to reinvest in growth, to pay off debt, and/or add to its cash reserves.
According to analysts' estimates, Gladstone Commercial is estimated to report earnings of $0.00 in the coming year, while the Company's annualized dividend is $1.50. One of the primary reasons for the difference between earnings and the annualized dividend is that REITs are structured by law to distribute at least 90% of earnings. Moreover, since REITs generate income from owning portfolios of investment real estate, they are likely to have higher depreciation charges.
Since depreciation is a non-cash charge, it does not directly impact the ability of dividend the Companies can distribute. For this reason, Fund from Operations (FFO) is calculated by adding depreciation and amortization to earnings, subtracting any gains on sales provides a better picture of the Company's profitability and capacity to pay and sustain dividends. For instance, for the quarter ended March 31, 2017, Gladstone Commercial's core FFO available to common shareholders were $9.7 million, or $0.38 per share, while its net income available to common stockholders was $1.7 million, or $0.07 per share.
About the Company
Gladstone Commercial is a real estate investment trust focused on acquiring, owning and operating net leased industrial and office properties across the United States. As of March 31, 2017, its real estate portfolio consisted of 95 properties located in 24 states, totaling approximately 10.9 million square feet.
Recent Development for Gladstone Commercial
On July 10, 2017, Gladstone Commercial announced that it completed the acquisition of a 300,000 square foot, single-tenant Class-A industrial building located in Philadelphia, Pennsylvania for $26.4 million.
The property is leased to the National Archives and Records Administration ("NARA") through 2032, with a termination option beginning in 2027. The property is home to NARA's Federal Records Center and The National Archives at Philadelphia. Gladstone Commercial stated that the lease is fully guaranteed by the United States Government. The mission-critical property serves as the federal records center for over 80 federal agencies located throughout the Northeast and Mid-Atlantic states.
Gladstone Commercial noted that the going-in cash capitalization rate for the transaction is 6.41% and the GAAP capitalization rate is 6.62%. Simultaneously with the acquisition of the property, the Company closed a $14.9 million 10-year mortgage with a fixed rate of 3.75%.
Stock Performance
On Monday, July 17, 2017, the stock closed the trading session at $21.79, rising 1.40% from its previous closing price of $21.49. A total volume of 113.59 thousand shares has exchanged hands. Gladstone Commercial's stock price rallied 8.95% in the past six months and 23.04% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 8.41%. The stock has a dividend yield of 6.88%. At Monday's closing price, the stock's net capitalization stands at $543.88 million.
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