Agree Realty Boosts Annual Dividend 4.5% Over Last Six Years (ADC)

Agree Realty boosted its annual dividend payout for the sixth consecutive year and over that period maintained an average growth rate of 4.5% per year.

The company’s current yield is 4.2% and its one-year asset appreciation is 9%, which rewarded its shareholders with a combined total return of 14.75%. Agree Realty will pay its next dividend distribution in the first week of next year, on January 3, 2018, to all its shareholders of record before the December 19, 2017 ex-dividend date.

Agree Realty Corp. (NYSE:ADC)

Founded in 1971 by Richard Agree as the Agree Development Company, the company developed community shopping centers primarily throughout the Midwestern and Southeast United States. The company continued its operation as a publicly traded real estate investment trust (REIT) after its initial public offering in 1994, under the Agree Realty Corporation name. Headquartered in the Detroit suburb of Bloomfield Hills, Michigan, the Agree Realty Corporation owns and manages retail properties primarily leased to national and regional retail companies in the United States. The company’s current portfolio contains 427 assets with a total of approximately 8.3 million square feet of gross leasable space in 43 states. The company provides facilities for more than 300 national brands. Top 10 brands in terms of store count are Walgreens, AutoZone, Family Dollar, Dollar General, Taco Bell, O’Reilly Auto Parts, Mister Car Wash, Tractor Supply, Advance Auto Parts and CVS.

The company distributes its current $2.08 annualized dividend as quarterly payments of $0.52. This current quarterly payment amount is 3% higher than the previous quarter’s $0.505 dividend distribution and equivalent to a 4.2% dividend yield. The current 4.2% yield is within 10% of the 4.63% average yield of the Retail Industry REIT segment and 16.3% higher than the 3.6% average yield of the entire Financial sector.

Between 1994 and 2010, the annual dividend rose slowly from $1.80 to $2.04 with small increases in some years and several multi-year stretches of flat dividend payouts. After cutting the annual dividend to $1.60 over two years in 2011 and 2012, the company resumed its rising dividend payouts in 2013.

Since 2013, the annual dividend payout rose at an average rate of 4.5% per year, which resulted in a 30% rise in the total annual distribution over the past six consecutive years. With the most recent hike, the REIT’s annual dividend recovered completely from the 2011-2012 dividend cuts. The $2.08 annualized payout for 2018 is now the company’s all-time highest annual dividend distribution and it exceeds the company’s previous $2.04 peak annual payout from 2010 by 2%.

The company’s share price experienced some serious volatility over the past 12 months with several drops of 5% or more and three spikes where the share price peaked above the $50 mark. The share price started its trailing 12-month period with a 5% drop in just one week to reach its 52-week low of $43.30 on December 15, 2016. Then, a 17.2% jump drove the share price above the $50 mark for the first time by the end of February 2017. A 4.7% drop and a subsequent 5.6% rise resulted in the share price reaching its 52-week high – as well as all-time high – on April 20, 2017.

However, that peak level was short lived, as the share price dropped more than 12% in less than a month. After that drop, the share price required almost four months before it fully recovered and rose to $51.02 – less than 0.2% below the April all-time high – by September 15, 2017. Since, the mid-September spike, the share price pulled back 2.6% and closed on December 8, 2017, at 49.69, which is 9% higher than it was one year ago, 14.8% above the 52-week low from December 15, 2016, and nearly double the level from five years ago. In addition to the 14.75% total return over the past 12-months, Agree Realty rewarded its shareholders with an 83% total return over the past three years and 124% over the last five years.

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