2 REITs Offer 50% Annual Dividend Growth Rates
By: Ned Piplovic,
Two Washington D.C., area real estate investment trusts (REITs) have rewarded their investors with annual dividend growth rates of almost 50% every year for at least seven years in a row.
In addition to the recent extraordinary annual dividend payout growth, both REITs have yielded between 3% and 6% over the past five years and have returned a 40%-plus asset appreciation in the last 12 months.
The ex-dividend dates for these two equities are in late June with July 17, 2017, pay dates.
Dupont Fabros Technology, Inc. (NYSE:DFT)
DuPont Fabros Technology, Inc., is a real estate investment trust (REIT) that owns, manages and leases large-scale data center facilities. The company leases its data centers to technology companies for housing computer servers that support their critical business processes.
Additionally, the company provides technical assistance to its tenants. The assistance includes layout design, installation of electrical power circuits, data cabling, setting up of server cabinets and racks, as well as computer room airflow analyses and monitoring. DFT operates 3.5 million gross square feet of space across 12 data centers in three major U.S. markets and Canada. The data centers are in northern Virginia, Chicago, Santa Clara, California, and Ontario, Canada. Founded in 2007, the company has its headquarters in Washington, D.C.
The current quarterly dividend of $0.50 converts to a $2.00 annual payout and a 3.1% dividend yield. The company started paying a dividend in 2007 and had to cut its annual payout only once in 2009. Over the last eight consecutive years since the 2009 dividend cut, the company has increased its annual payout by an average annual growth rate of 49.5% every year. Consequently, the current annual dividend payout is 25 times higher than the annual dividend amount in 2009.
If the dividend growth is not attractive enough, the share price showed excellent growth, as well, and has tripled over the last five years. The share price grew 44.5% just over the past 12 months. After a 15% drop between June and the end of October 2016, the share price rose 71.6% to reach its 52-week high on June 14, 2017.
LaSalle Hotel Properties (NYSE:LHO)
LaSalle Hotel Properties is a real estate investment trust (REIT) that owns, redevelops and leases primarily upscale and luxury full-service hotels in convention, resort and urban business markets. The company’s current portfolio consists of 42 hotels that have approximately 10,700 guest rooms in 15 markets spread across seven states and the District of Columbia. Some of LHO’s strategic partnerships are with premier hotel operators, such as Hyatt, Kimpton, Marriott International and Hilton Hotels. The company was founded in 1998 and its head office is in Bethesda, Maryland.
The company started to pay a monthly dividend in 1998, but never managed more than three consecutive years of dividend hikes. At the beginning of 2009, the company reduced its annual dividend payout more than 75% by cutting the monthly payment to less than half and converting the monthly payment to a quarterly dividend distribution.
Since that dividend cut in 2009, the company has enlarged its annual dividend payout almost 16-fold. That dividend growth came because of a 48.5% average annual growth rate for the past seven consecutive years.
The current quarterly dividend payout is $0.45, which is equivalent to a $1.80 annual distribution and a 5.9% yield. The current 5.9% yield is 20% above the company’s five-year average yield of 4.9%.
Including one price dip between the end of August and beginning of November 2016, the company’s share price rose 43.2% between its 52-week low of $21.37 in June 2016 and its new 52-week high of almost $31, where it is trading in June 2017.
The share price’s 50-day moving average (MA) has dropped since the beginning of February 2017. However, after four months of falling, the 50-day MA reversed course at the beginning of June 2017 and has been rising over the past two weeks, which is an indication that the share price could have a little more upside potential left.
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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.