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Taubman Raises Dividend

Zacks Equity Research

Taubman Centers Inc. (TCO) announced an 8.1% hike in its quarterly cash dividend rate. The company will now pay a dividend of 50 cents per share, up from 46.25 cents paid in the prior quarter. The increased dividend will be paid on Mar 29, 2013 to stockholders of record on Mar 18.

Taubman has established an impressive track record of conservative capital management and cash returns to shareholders in the form of steady dividend. It has never slashed its common dividend since it went public in 1992 and has in fact hiked its dividend 16 times since then.

Michigan-based Taubman Centers Inc. is a real estate investment trust (:REIT), which is engaged in the ownership, management and/or leasing of 27 regional, super-regional and outlet shopping centers in the U.S. and Asia.

Taubman has a solid portfolio of the best-in-class retail malls that generates robust mall tenant sales. Acquisitions of favorably situated assets are expected to be accretive to its top line going forward. Also, the company has a healthy balance sheet with minimal debt maturities and adequate liquidity.

Moreover, last month, Taubman came up with an impressive fourth quarter and full year 2012 earnings results, primarily driven by increase in rents and robust occupancy levels. As such, the company is well poised to maintain its growth curves and simultaneously benefit the shareholders with steadily rising dividends.

In addition to Taubman, many other REITs have raised their dividends in the recent months. Recently, Agree Realty Corporation (ADC) announced a 2.5% hike in its quarterly cash dividend rate, while in February, Simon Property Group Inc. (SPG) raised its dividend by 4.5% sequentially and BRE Properties Inc. (BRE) declared a 2.6% sequential hike in its quarterly cash dividend.

As a matter of fact, solid dividend payouts are arguably the biggest attraction for REIT investors as the U.S. law requires these companies to distribute 90% of their annual taxable income in the form of dividends to shareholders.

Taubman currently retains a Zacks Rank #2 (Buy).

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