2 Securities Offer 3.2% Yields and Years of Dividend Boosts
By: Ned Piplovic,
In addition to current dividend yields of 3.2% and 3.3%, a regional Midwest bank and an apartment real estate investment trust (REIT) have rewarded their investors with enhanced dividend payouts that were not lowering once over the past two decades.
Over the past 20 years, the two equities combined have failed to boost their annual dividend amounts only eight times when they paid out annual dividends equal to the previous year’s amount. The current consecutive dividend hikes record for the two equities is four and seven years.
While the REIT’s share price is flat over the past 12 months, the bank’s share price rose more than 20% and both equities increased their share prices at least 60% over the past five years. Both equities have identical ex-dividend dates of July 12, 2017 with matching pay dates on July 31, 2017.
Croghan Bancshares, Inc. (OTOCQX:CHBH)
Croghan Bancshares, Inc. operates as the holding company for Croghan Colonial Bank and provides a range of commercial and retail banking services to individuals and business clients in Ohio. The bank provides standard banking services like on-demand deposit accounts, time deposit accounts, private consumer loans and commercial loans. Additionally, the bank offers business lines of credit, small business administration and U.S. Department of Agriculture loans, state loans and equipment leasing services. The company also offers trust and estate planning, investment and insurance services, credit and debit cards, as well as online and mobile banking services.
As of June 2017, the bank operated 18 banking center locations across northwest Ohio. Founded in 1888, Croghan Bancshares, Inc. has its headquarters in Fremont, Ohio.
The current quarter’s dividend of $0.37 is 2.8% higher than last quarter’s $0.36 distribution. Annualizing the current quarterly dividend, we get a $1.48 annual dividend per share, which converts to a 3.2% dividend yield.
The current hike is the fourth consecutive dividend enhancement since the company resumed rising dividends in 2013 after four years of flat payouts between 2009 and 2012. Prior to these four years of even annual dividend payouts, the company hiked its dividend every year for more than a decade. Even with the four years of no dividend hikes, the company’s average annual dividend boost is almost 5% per year since 1999.
Since early July 2016, the share price rose with minor volatility over the last 12 months and managed to gain almost 21% compared to last year’s level. The share price closed at its all-time high of $47.50 several times in the past 30 days, most recently on June 15, 2017. Since the most recent high, the share price pulled back about 2%. However, considering the price volatility over the past year, the current pullback should be nothing more than a buying opportunity.
Mid-America Apartment Communities, Inc. (NYSE:MAA)
Mid-America Apartment Communities, Inc., incorporated in 1993 and headquartered in Memphis, Tennessee, is a multifamily focused real estate investment trust (REIT). The company owns, operates, acquires and develops apartment communities primarily located in the Southeast and Southwest regions of the United States. As of March 31, 2017, MAA owned or had ownership interest in 304 communities with more than 100,000 operating apartment homes in 17 states and the District of Columbia. The company has been included in the S&P 500 index since December 2016.
Starting in early July 2016, the share price lost 16.4% of its value to reach its 52-week low on October 3, 2017. But, after hitting the low in October, the share price reversed its trend and rose more than 30% to reach its new all-time high price on June 15, 2017. The current share price is down 8% from the recent all-time high as of closing on July 7, 2017. The 50-day moving average (MA) has been rising since it crossed above the 200-day MA in mid-February 2017 and there are no trend reversal indications yet.
Mid-America Apartment Communities announced its expectation to release second-quarter 2017 results after that market’s close on Wednesday, July 26. The company scheduled its second-quarter results conference for the following morning – Thursday, July 27, 2017 – at 9:00 a.m. Central Time and 10:00 a.m. Eastern Time.
The company’s current $0.87 quarterly dividend is equivalent to a $3.48 annual dividend payout and a 3.3% dividend yield. While the 2008 financial crisis forced many companies to cut their dividends, MAA managed to pay a flat annual dividend for two years and resume its annual dividend boosts immediately in 2011. Over the past seven years, the company increase its annual dividend payouts at a 5.1% average rate every year, which resulted in a 41% total dividend boost since 2011. The average annual dividend growth rate since 2011 is more than double the 2.5% annual growth rate over the past two decades.
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