Easterly Government Properties Boosts Quarterly Dividend 4%, Pays 4.9% Yield (DEA)
By: Ned Piplovic,
The Easterly Government Properties currently pays a 4.9% dividend yield and has boosted its dividend 4% compared to the previous period.
The current quarterly dividend boost is the second hike this year and the trust has been averaging a nearly double-digit-percentage boosts per quarter over the past two years. In addition to the strong dividend payout growth, the company has rewarded its shareholders with a 10% asset appreciation over the last 12 months.
The trust’s next ex-dividend date will be on December 5, 2017, with the pay date following just two weeks later, on December 21, 2017
Easterly Government Properties Inc. (NYSE:DEA)
Formed in 2015 and headquartered in Washington, D.C., the Easterly Government Properties Inc. operates as a real estate investment trust (REIT). The trust acquires, develops and manages commercial real estate properties. While the REIT has a few properties leased to civilian companies, it generates most of its revenue by leasing properties to government agencies through the General Services administration (GSA). Resulting from cooperation discussions that started in 2014, two private companies – Easterly LLC and Western Devcon Inc. – contributed 15 and 14 properties, respectively, to the new REIT, which was formed in February 2015. As of November 2017, the REIT leased to the U.S. Government offices, courthouses, laboratories, warehouses and Veterans Administration outpatient facilities in 18 states. Additionally, the REIT has a small portion of its leases with non-governmental entities, such as Parbel of Florida – a subsidiary of the French cosmetics conglomerate L’Oreal – and United Technologies – a Pratt & Whitney subsidiary. As of November 2017, the trust managed approximately 8,500 individual leases that account for more than 200 million square feet of rentable space.
The REIT boosted its current quarterly dividend 4% from $0.25 in the previous period to the current $0.26 payout. This current payout is equivalent to a $1.04 annualized dividend distribution per share and a 4.9% yield. Since beginning to pay dividends in the second quarter of 2015, the trust has hiked its quarterly dividend payout twice every year. Over the last two years, the quarterly dividend payout rose at an average rate of 11.3% per year. Compared to the trust’s first quarterly dividend amount in 2015, the current quarterly payout is 136% higher.
In addition to a steady dividend distribution growth, the current dividend yield is outperforming the average yield of the REIT’s peers in the Financials sector and the Real Estate Development segment by more than 30%.
While experiencing some volatility and going through few up-and-down cycles, the share price rose almost 13% from its 52-week low of $19.15 on November 23, 2016, and reached its 52-week high of $21.60 by June 27, 2017. After peaking in late June, the share price dropped more than 10% by August 15, 2017. The share price fell to $19.37 – just 1% above its November 2016 52-week low – before reversing trend and rising again with moderate volatility. The share price closed on November 22, 2017, at 21.06, which is just 2.5% below the June peak and 10% above the share price from 12 months ago. Since the REIT’s formation in February 2015, its share price has increased more than 30%.
As a combined benefit of dividend enhancement and share-price appreciation, the shareholders received a total return of 18.5% over the last 12 months and a total return of 46% since the REIT’s formation in February 2015.
The stock price’s 50-day moving average (MA) fell briefly below the 200-day moving average in early September, which was a reasonable cause for concern regarding the direction of the share price. However, the 50-day MA reversed its downtrend, broke above the 200-day MA in a bullish manner on October 18, 2017, and continues to rise, which is a good indication that the share price could continue its ascent for the near future in support of the rising dividend payouts.
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