Cousins Properties Offers Investors 2.7% Dividend Yield (CUZ)
By: Ned Piplovic,
After failing to raise its annual dividend and incurring four annual dividend cuts between 2005 and 2013, Cousins Properties (NYSE:CUZ) is offering its shareholders a third dividend boost within the past five years and a 2.7% current dividend yield.
The company’s 2.7% dividend yield is trailing the company’s own five-year average yield of 3.4%. However, the dividend yield decline resulted from strong share price growth. Just 90 days earlier, the dividend yield was 3.1%, and the dividend yield was as high as 3.6% at the end of 2016.
The company’s share price experienced significant volatility over the past five years and lost almost 50% between September 2014 and October 2016. However, since the October 2016 low, the volatility subsided, and the share price maintained an overall uptrend. Additionally, technical indicators for June 2018 suggest that the share price ascend should continue over the near term.
The dividend boost for 2018 and the asset appreciation combined to reward the company’s shareholders with a double-digit percentage growth rate over the past 12 months. The company will distribute its next dividend on the July 16, 2018, pay date to all its shareholders of record before the July 2, 2018, ex-dividend date.
Cousins Properties (NYSE:CUZ)
Based in Atlanta, Georgia, and founded in 1958, Cousins Properties (NYSE:CUZ) is a fully integrated, self-administered and self-managed real estate investment trust (REIT). The company focuses on development, acquisition, leasing and property management of Class A office towers in the high-growth Sun Belt markets. The company currently owns and manages more than 15 million square feet of office space in Atlanta, Georgia (6.6 million square feet); Austin, Texas (1.9 million square feet); Charlotte, North Carolina (3.1 million square feet); Tampa, Florida (1.7 million square feet); and Phoenix, Arizona (1.3 million square feet). Additionally, the company is developing a mixed-use complex in Chapel Hill, North Carolina, with 159,000 square feet of offices, 42,000 square feet of retail space and 246 apartment units. Additionally, the company has formed a joint venture to develop a 23-story office tower with approximately 466,000 rentable square feet of office and retail space in the Uptown Dallas submarket.
The company’s current $0.065 quarterly dividend is 8.3% higher than the $0.06 quarterly dividend distribution from the same quarter last year. This new quarterly amount is equivalent to a $0.26 annualized dividend distribution and a 2.7% forward dividend yield.
After starting its dividend distribution in 1990, the company boosted its annual dividend amount every year until 2002. Over the subsequent six years, the company paid a flat $1.48 annual dividend. The company also paid special dividends in three out of four years between 2003 and 2006. Over that span, the total special dividend payout amounted to 113% of the regular dividend payouts.
However, the company cut its annual dividend amount over four consecutive years starting during the financial crisis in 2008. By 2011, the company reduced its annual dividend amount by 88%. After another three years of flat annual dividend payouts, the company started hiking its dividend again. With three annual hikes over the past five years, the company increased its annual dividend payout 45%, which is equivalent to an average growth rate of 7.6% per year.
Between the onset of the trailing 12 months and mid-December 2017, the share price ascended 7.5%. However, the share price reversed direction in December 2017, lost its gains by the end of January 2018 and dropped an additional 6.7% before reaching its 52-week low of $8.31 on March 23, 2018.
After lingering around the $8.50 level for another month, the share price began growing again in mid-April. The share price rose a total of 18.3% above the March low to reach its 52-week high of $9.83 on June 12, 2018. Since its 52-week peak, the share price has pulled back 2.3% and closed on June 22, 2018, at $9.65. This closing price was 8.3% higher than it was one year earlier and 16.1% above the 52-week low from March 2018, but still 4% below its level from five years ago.
The combined total return of the company’s dividend payouts and share price growth were 11.1% over the past 12 months and 37.2% over the past three years. While the current share price is still 5% lower than it was five years ago, the strong dividend growth over the five-year period managed to overcome the share price shortcoming and rewarded investors with a total return of 57.4%.
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