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Is Mid-America's (MAA) Latest Dividend Hike Sustainable?
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Mid-America Apartment Communities’ (MAA - Free Report) , also known as MAA, board of directors approved an increase in the company’s quarterly dividend payment. The company will now pay out $1.40 per share, which reflects a hike of 12% from the prior dividend of $1.25.
Based on the increased rate, the annual dividend comes to $5.60 per share, denoting an increase of 60 cents per share from the prior dividend level. At this new rate, the annualized yield comes at 3.38%, based on the stock’s closing price of $165.63 on Dec 13. The new dividend will be paid out on Jan 31, 2023 to shareholders of record as of Jan 13, 2023.
Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and MAA remains committed to that. The company has a good track record of paying out dividends to its shareholders.
The recent hike reflects MAA’s ability to generate solid income through its operating platform and high-quality portfolio. MAA has delivered 13 years of consecutive dividend increases.
In May 2022, the company announced a common stock cash dividend of $1.25 per share, marking a 15% hike over the prior payment. Based on the dividends paid out over the trailing four quarters, MAA’s dividend yield is 3.02%.
In addition, with the expected 2022 funds from operations (FFO) per share growth of 20.68%, ahead of the industry’s average of 12.05%, the increased dividend is likely to be sustainable.
MAA maintains a well-balanced, diverse portfolio across the Southeast and Southwest regions of the United States. The portfolio is diversified in terms of markets, submarkets, product types and price points. This diversification shields the company from an economic downturn in any particular market, choppiness in any product type or assets belonging to specific price points and helps generate a consistent revenue stream.
MAA’s diversified Sunbelt portfolio of suburban-focused communities was less severely affected by the pandemic and the economic shutdown. The pandemic accelerated employment shifts and population inflow into the company’s markets as renters sought more business-friendly, lower-taxed and low-density cities. These favorable longer-term secular dynamic trends are increasing the desirability of its markets. Amid these, MAA is poised to capture recovery in demand and leasing compared with expensive coastal markets.
MAA’s current cash flow growth is projected at 39.17% compared with the 14.86% growth projected for the industry. Moreover, this REIT’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 10.60% compares favorably with the industry’s 4.78%, reflecting that MAA is more efficient in using shareholders’ funds than its peers.
Given its balance sheet strength and prudent financial management, the company is well-poised to capitalize on growth opportunities and reward shareholders efficiently. Moreover, looking at its lower dividend payout (compared to its industry), it seems that its dividend distribution is expected to be sustainable.
On Dec 8, American Tower Corporation (AMT - Free Report) rewarded its investors with a 6.1% sequential hike in the quarterly dividend on the company’s common stock, increasing it to $1.56 per share from the $1.47 paid out earlier. The raised dividend is scheduled to be paid out on Feb 2 to shareholders of record as of Dec 28, 2022. Check American Tower’s dividend history here.
On Dec 5, Alexandria Real Estate Equities, Inc. (ARE - Free Report) announced a 2.5% sequential hike in its fourth-quarter 2022 cash dividend payout. Delighting its shareholders, Alexandria Real Estate Equities will now pay out a dividend of $1.21 per share, up from the $1.18 paid out in the third quarter.
On Dec 7, CubeSmart (CUBE - Free Report) announced a 14% increase in its quarterly dividend to 49 cents per share. CubeSmart will pay out the increased dividend on Jan 17 to common shareholders of record on Jan 3, 2023. Check CubeSmart’s dividend history here.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Is Mid-America's (MAA) Latest Dividend Hike Sustainable?
Mid-America Apartment Communities’ (MAA - Free Report) , also known as MAA, board of directors approved an increase in the company’s quarterly dividend payment. The company will now pay out $1.40 per share, which reflects a hike of 12% from the prior dividend of $1.25.
Based on the increased rate, the annual dividend comes to $5.60 per share, denoting an increase of 60 cents per share from the prior dividend level. At this new rate, the annualized yield comes at 3.38%, based on the stock’s closing price of $165.63 on Dec 13. The new dividend will be paid out on Jan 31, 2023 to shareholders of record as of Jan 13, 2023.
Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and MAA remains committed to that. The company has a good track record of paying out dividends to its shareholders.
The recent hike reflects MAA’s ability to generate solid income through its operating platform and high-quality portfolio. MAA has delivered 13 years of consecutive dividend increases.
In May 2022, the company announced a common stock cash dividend of $1.25 per share, marking a 15% hike over the prior payment. Based on the dividends paid out over the trailing four quarters, MAA’s dividend yield is 3.02%.
The company increased its dividend six times in the past five years, and the five-year annualized dividend growth rate is 4.95%. Check Mid-America Apartment’s dividend history here.
In addition, with the expected 2022 funds from operations (FFO) per share growth of 20.68%, ahead of the industry’s average of 12.05%, the increased dividend is likely to be sustainable.
MAA maintains a well-balanced, diverse portfolio across the Southeast and Southwest regions of the United States. The portfolio is diversified in terms of markets, submarkets, product types and price points. This diversification shields the company from an economic downturn in any particular market, choppiness in any product type or assets belonging to specific price points and helps generate a consistent revenue stream.
MAA’s diversified Sunbelt portfolio of suburban-focused communities was less severely affected by the pandemic and the economic shutdown. The pandemic accelerated employment shifts and population inflow into the company’s markets as renters sought more business-friendly, lower-taxed and low-density cities. These favorable longer-term secular dynamic trends are increasing the desirability of its markets. Amid these, MAA is poised to capture recovery in demand and leasing compared with expensive coastal markets.
MAA’s current cash flow growth is projected at 39.17% compared with the 14.86% growth projected for the industry. Moreover, this REIT’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 10.60% compares favorably with the industry’s 4.78%, reflecting that MAA is more efficient in using shareholders’ funds than its peers.
Given its balance sheet strength and prudent financial management, the company is well-poised to capitalize on growth opportunities and reward shareholders efficiently. Moreover, looking at its lower dividend payout (compared to its industry), it seems that its dividend distribution is expected to be sustainable.
So far in the quarter, shares of Zacks Rank #3 (Hold) MAA have rallied 6.8% against the industry’s decline of 1.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Recent Dividend Increases
On Dec 8, American Tower Corporation (AMT - Free Report) rewarded its investors with a 6.1% sequential hike in the quarterly dividend on the company’s common stock, increasing it to $1.56 per share from the $1.47 paid out earlier. The raised dividend is scheduled to be paid out on Feb 2 to shareholders of record as of Dec 28, 2022. Check American Tower’s dividend history here.
On Dec 5, Alexandria Real Estate Equities, Inc. (ARE - Free Report) announced a 2.5% sequential hike in its fourth-quarter 2022 cash dividend payout. Delighting its shareholders, Alexandria Real Estate Equities will now pay out a dividend of $1.21 per share, up from the $1.18 paid out in the third quarter.
The increased dividend will be paid out on Jan 13, 2023 to shareholders on record as of Dec 30, 2022. Check Alexandria’s dividend history here.
On Dec 7, CubeSmart (CUBE - Free Report) announced a 14% increase in its quarterly dividend to 49 cents per share. CubeSmart will pay out the increased dividend on Jan 17 to common shareholders of record on Jan 3, 2023. Check CubeSmart’s dividend history here.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.