Armada Hoffler Properties Grows Dividend 10% per Year for Five Years (AHH)

Armada Hoffler Properties Inc. (NYSE:AHH) pays an above-average dividend yield of 4.9% and has boosted its annual dividend payout at nearly 10% per year for the past five successive years.

In addition to the strong dividend growth over the past few years, the company’s share price rose 7.7% over the past 12 months and reached its new 52-week high in mid-December 2017. The company has its next ex-dividend date on December 26, 2017, and the next pay date in the first week of next year on January 4, 2018.

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Armada Hoffler Properties Inc. is now a publicly owned real estate investment trust (REIT). Charles Hoffler founded the Armada Hoffler company in 1979, which was based in Chesapeake, Virginia. The company moved its headquarters to Virginia Beach in 2003. After operating for 34 years as a private entity, the company completed a $218 million initial public offering (IPO) on May 8, 2013, and became a publicly traded REIT.

The REIT owns and manages a diversified portfolio of office, retail and multifamily facilities throughout the Mid-Atlantic and Southeastern United States, with a concentration of its assets strategically located in the Greater Baltimore/Washington, D.C., area, Coastal Virginia and a selection of high population density markets throughout the Carolinas. As of October 10, 2017, the company’s asset portfolio consisted of 47 properties in seven states with more than 4.4 million square feet of space and included more than 1,200 residential units.

The company’s current $0.19 quarterly dividend payout converts to a $0.76 annualized dividend payout and currently yields 4.9%. This current yield is in line with the average yield of Armada Hoffler’s peers in the Diversified Industrial REITs segment and 32% higher than the current 3.68% average yield of the entire Financials sector.

The REIT has been paying dividends since its inception in 2013, as required by law to stay eligible to take advantage of the favorable tax status. Since 2013, the REIT hiked its annual dividend payout at an average rate of 9.6% per year and increased its total annual dividend amount by almost 60% during the five-year period.

The share price began the trailing 12-month period by rising 3% from $14.47 on December 13, 2016, to $14.87 on January 4, 2017. However, after that modest rise, the share price embarked on a six-month period of significant volatility. Between January 4, 2017, and July 10, 2017, the share price went through five distinct trend reversals with each swing exceeding an 11% share-price drop or rise. At the end of that period of volatility, the share price hit its 52-week low of $12.73 on July 10, 2017.

After bottoming out in early July 2017, the share price reversed direction one more time, embarked on its current uptrend and recovered all its losses since December 2016 by the beginning of November 2017. Since the July low, the share price rose 22.5% and reached its new 52-week high of $15.60 on November 11, 2017, which is also the share price’s new all-time high. The share price dropped a mere $0.01 at the end of the next trading day. As of December 12, 2017, the share price was 7.7% higher than it was 12 months earlier and 34% higher than it was five years ago.

The combined benefit of the dividend income and capital growth over the past few years rewarded the company’s shareholders with a 12.1% total return in the past 12 months and an 89% total return over the past three years.

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