2 Real Estate Trusts Offer 4.4%-Plus Yields and 20%-Plus Share Price Growth
By: Ned Piplovic,
With share price growth of more than 20% over the last 12 months, dividend yields of more than 4.4% and five years of rising dividends, these two real estate trusts show that investment opportunities exist outside the currently hot technology sector.
In addition to the positive performance over the past year and the five years of growing dividend distributions, these two equities have rewarded their shareholders with increased stock value of 50% during the past five years. The dividend ex-date for one of the equities is early next week on May 15, 2017, and the ex-dividend for the other security is a little later in mid-June.
Arbor Realty Trust, Inc. (NYSE:ABR)
Arbor Realty Trust (NYSE: ABR) is a real estate investment trust (REIT) that invests in real estate-related bridge and mezzanine loans, preferred equity notes, discounted mortgage notes and other real estate-related assets. The REIT’s objective is to maximize the difference between the yield on its investments and the cost of financing these investments to generate cash for distribution, to facilitate capital appreciation and to maximize total return to its stockholders. Founded in 2003, the company’s headquarters are in Uniondale, New York.
The REIT boosted its quarterly dividend distribution 5.9% from $0.17 to $0.18. The current annualized payout of $0.72 is equivalent to an 8.3% dividend yield, which is 14.3% higher than the five-year 7.3% yield average. Arbor Realty Trust has increased its dividend at an average rate of more than 20% annually for the past five consecutive years.
Between May 2016 and the beginning of March 2017, the share price traded relatively flat with some volatility mostly between $7.00 and $7.50. However, since the beginning of March, the share price rose almost 19%, reached its 52-week high on May 9 and achieved a 23.3% increase over May 2016 price levels.
In its report for the first quarter of 2017 that was released on May 5, 2017, the REIT reported a net income of $15.6 million, which is equivalent to $0.30 per diluted common share. Adjusted funds from operations (AFFO) of $24.7 million convert to $0.33 per diluted common share.
Getty Realty Corp. (NYSE:GTY)
Getty Realty Corp. is a publicly-traded real estate investment trust in the United States. The REIT specializes in the ownership, leasing and financing of convenience store and gasoline station properties. The company owns more than 820 properties in 24 states and Washington, D.C. that are leased and operated by some of the largest retail gasoline brands, including 76, Aloha, BP, Citgo, Conoco, Exxon, Getty, Mobil, Shell and Valero. The company was founded in 1955 and is headquartered in Jericho, New York.
The REIT declared a regular quarterly dividend of $0.28 for the third quarter 2017, which converts to a $1.12 annual payout and a 4.4% yield. While the current quarterly payout is the same as the first two quarters of the company’s fiscal 2017, it is 12 % higher than last year’s regular quarterly dividend. Over the past five years, the annualized regular dividend rose an average rate of more than 10% every year.
Getty Realty’s share price rose 28% between May 2016 and its 52-week high at the end of February 2017. The price pulled back about 5% since the February high and it closed on May 8, 2017, at $25.30, which is 21.5% above the May 2016 share price.
The REIT followed a solid performance in 2016 with strong first quarter 2017 results. On May 5, 2017, it reported net earnings of $0.28 per share. The funds from operations (FFO) were $0.52 per share, or an adjusted $0.41 per share.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.