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Investors are always delighted to hear that an owned stock has announced a dividend increase. For income investors, this means a monthly or quarterly raise. However, for investors more concerned with growth, dividend hikes also show that a Board of Directors has faith that the company can increase its future earnings and comfortably cover the dividend.
In addition, a dividend increase often makes the stock more attractive to investors, so share price appreciation may occur.
Look at four real estate investment trusts (REITs) that have announced dividend hikes this week. Two of the REITs have stellar records of dividend growth, while the other two have cut dividends in recent years:
Innovative Industrial Properties Inc. (NYSE:IIPR) is a San Diego-based internally managed, diversified industrial REIT specializing in triple-net leases and sale-leasebacks on commercial properties with cannabis companies as its sole tenants. It also creates loans for cannabis operators who require funding. It was founded in 2016 and had its IPO on Dec. 1 of that year. As of May 2024, Innovative Industrial owned and operated 108 properties with 8.9 million rentable square feet across 19 states, with a weighted average lease term (WALT) of 14.8 years.
Innovative stands to benefit from the recently proposed reclassification of cannabis from Schedule I to Schedule III, taking it out of a classification that includes heroin, LSD and ketamine.
In recent news, on June 10, Innovative Industrial announced it purchased a 145,000-square-foot industrial space in Ocala, Florida, for $13 million and enacted a long-term, triple-net lease with a unit of AYR Wellness Inc. (OTC:AYRWF) for 98,000 square feet of the space.
On June 14, Innovative Industrial Properties announced a 4.4% increase in its second-quarter dividend from $1.82 to $1.90. The dividend is payable July 15 to shareholders of record at the close of business on June 28.
Over the past five years, Innovative Industrial has increased its quarterly dividend by 143% from $0.78 per share with no cuts or suspensions. The annual dividend of $7.60 per share yields 7.01%.
W.P. Carey Inc. (NYSE:WPC) is a New York City-based diversified net-lease REIT, whose single-tenant properties include industrial, warehouse, retail and self-storage units. It was founded in 1973 and recently celebrated its 50th year of property investments.
At the end of Q1 2024, W.P. Carey had 1,282 net-leased and 89 self-storage properties across 26 countries. Its net lease portfolio includes 335 tenants with a WALT of 14.9 years and an excellent occupancy rate of 99.1%. However, the occupancy rate of the self-storage properties was only 90.4%.
One of W.P. Carey’s 2024 goals was to acquire more properties and it has done so. On June 3, W.P. Carey announced it had acquired three Arizona properties. One was a newly built, 300,000-square-foot distribution center for $40 million; the other two were fitness centers with an existing tenant for $28 million.
Thus far in 2024, W.P. Carey has made investments and future commitments of approximately $700 million.
On June 13, W.P. Carey announced an increase in its quarterly dividend from $0.865 to $0.87 per share. The dividend is payable on July 15 to shareholders of record on June 28. W.P. Carey also raised its dividend in March, from $0.86 to $0.865 per share.
One caveat: Investors are still smarting after W.P. Carey cut its dividend almost 20% from $1.05 to $0.86 per share in December 2023 after a slight increase just a few weeks before. The cut was due to selling part of its office portfolio and the spin-off of the remaining offices into Net Lease Office Properties (NYSE:NLOP).
Chimera Investment Corp. (NYSE:CIM) is a New York City-based mortgage REIT (mREIT) that invests in a diversified portfolio of mortgage assets through residential mortgages, non-agency residential mortgage-backed Securities (RMBS), agency commercial mortgage-backed securities (CMBS), and agency RMBS. Chimera has $12.5 billion in total assets.
In recent news, on May 10, Chimera announced its Board of Directors approved a reverse stock split of its common stock with a ratio of 1-for-3. The split began with trading on May 22. Outstanding shares were reduced from 241.4 million to 80.5 million. Investors were not pleased with the news and the stock fell from over $14 to a low of $11.28 within a month. It has since partially recovered to a recent close of $11.93.
On June 13, Chimera Investments announced a 6% increase in its quarterly dividend from $0.33 to $0.35 per share.
Investors should note that Chimera’s total return (including dividends) has been -60.53% since Nov. 1, 2021, and the mREIT has cut its dividend four times since 2020.
Realty Income Corp. (NYSE:O) is a San Diego-based triple-net lease REIT with over 15,450 properties across 89 industries and over 1,500 tenants worldwide. The “Monthly Dividend Company,” as it calls itself, is a member of the S&P 500 and an S&P 500 Dividend Aristocrat, meaning it has consistently paid and raised its dividends for at least 25 years. Realty Income has increased its dividend 126 times since its IPO in 1994.
On June 4, Realty Income raised its full-year 2024 FFO guidance from $4.17-$4.29 to $4.19-$4.28 per share and its AFFO from $4.13-$4.21 to $4.15-$4.21. Management attributed the increase to improvements in its European investment environment.
On June 11, Realty Income increased its monthly dividend from $0.2625 to $0.2630 per share, payable July 15 to shareholders as of July 1. This was the 126th dividend increase since Realty Income’s IPO in 1994. The new monthly dividend brings the annualized dividend up to $3.156 per share with a yield of 5.9%.
On June 12, Keybanc analyst Upal Rana initiated coverage on Realty Income at Sector Weight. No price target was given.
Realty Income remains one of the safest and most consistent income-oriented REITs one can purchase.
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This article Four REITs That Just Increased Dividends originally appeared on Benzinga.com
Source: finance.yahoo.com