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Duke Realty (DRE) to Pay Special Dividend on Sale of Assets
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Ushering in good news for its shareholders, Duke Realty announced a special cash dividend of 85 cents per share. This was primarily the outcome from the sale of its assets. This dividend will be paid on Dec 12, 2017 to shareholders of record on Dec 1.
Notably, this real estate investment trust (REIT) made a sale of around $2.85 billion of assets through Sep 30, 2017. Particularly, Duke Realty resorted to the sale of its medical office assets in recent quarters. This strategic move is aimed at simplifying business model and transforming into a leading domestic pure play industrial REIT.
Usually, special dividends are paid by REITs on capital gains from the sale of assets to avoid paying tax. Solid dividend payouts remain the biggest attraction for REIT investors as the U.S. law requires these companies to distribute 90% of their annual taxable income in the form of dividends to shareholders.
Along with special dividends, Duke Realty continues to pay regular quarterly dividend. In fact, concurrent with third-quarter 2017 earnings release, Duke Realty announced a quarterly cash dividend on common stock of 20 cents per share. This marked a sequential hike of 0.5%. The third-quarter dividend will be paid on Nov 30 to shareholders of record as of Nov 16, 2017.
According to management, after going for this special dividend that satisfies the minimum REIT distribution requirements, the company will retain a significant part of sale proceeds for reinvestment in its industrial portfolio as well as strengthening balance sheet.
As a matter of fact, in the overall U.S. real estate market, industrial properties have grabbed attention on robust demand, a recovery in the economy and job market, strengthening e-commerce and a healthy manufacturing environment.
Duke Realty too is poised for growth by leveraging on the improving fundamentals backed by its solid portfolio of industrial properties that spans more than 145 million rentable square feet in 21 major U.S. logistics markets.
While we believe that the sale of its medical office assets would aid the company in focusing exclusively on industrial asset category, the dilutive impact on earnings from such sale of assets would be impossible to avoid in the near term.
Duke Realty currently carries a Zacks Rank #3 (Hold). Year to date, shares of the company have climbed 10.3%, outperforming 5.3% growth recorded by the industry.
Cedar Realty’s FFO per share estimates for 2017 remained unchanged at 54 cents over a month. Its share price has increased 18.0% in the past six months.
DCT Industrial Trust’s current-year FFO per share estimates have been revised upward by a cent to $2.44 in a month’s time. Its share price has increased 16.3% in the past six months.
Extra Space Storage’s 2017 FFO per share estimates have climbed 0.2% to $4.31 in a month’s time. Its share price has increased 12.6% in the past six months.
Note: All EPS numbers presented in this report represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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Duke Realty (DRE) to Pay Special Dividend on Sale of Assets
Ushering in good news for its shareholders, Duke Realty announced a special cash dividend of 85 cents per share. This was primarily the outcome from the sale of its assets. This dividend will be paid on Dec 12, 2017 to shareholders of record on Dec 1.
Notably, this real estate investment trust (REIT) made a sale of around $2.85 billion of assets through Sep 30, 2017. Particularly, Duke Realty resorted to the sale of its medical office assets in recent quarters. This strategic move is aimed at simplifying business model and transforming into a leading domestic pure play industrial REIT.
Usually, special dividends are paid by REITs on capital gains from the sale of assets to avoid paying tax. Solid dividend payouts remain the biggest attraction for REIT investors as the U.S. law requires these companies to distribute 90% of their annual taxable income in the form of dividends to shareholders.
Along with special dividends, Duke Realty continues to pay regular quarterly dividend. In fact, concurrent with third-quarter 2017 earnings release, Duke Realty announced a quarterly cash dividend on common stock of 20 cents per share. This marked a sequential hike of 0.5%. The third-quarter dividend will be paid on Nov 30 to shareholders of record as of Nov 16, 2017.
According to management, after going for this special dividend that satisfies the minimum REIT distribution requirements, the company will retain a significant part of sale proceeds for reinvestment in its industrial portfolio as well as strengthening balance sheet.
As a matter of fact, in the overall U.S. real estate market, industrial properties have grabbed attention on robust demand, a recovery in the economy and job market, strengthening e-commerce and a healthy manufacturing environment.
Duke Realty too is poised for growth by leveraging on the improving fundamentals backed by its solid portfolio of industrial properties that spans more than 145 million rentable square feet in 21 major U.S. logistics markets.
While we believe that the sale of its medical office assets would aid the company in focusing exclusively on industrial asset category, the dilutive impact on earnings from such sale of assets would be impossible to avoid in the near term.
Duke Realty currently carries a Zacks Rank #3 (Hold). Year to date, shares of the company have climbed 10.3%, outperforming 5.3% growth recorded by the industry.
Stocks to Consider
Some better-ranked stocks in the REIT space are Cedar Realty Trust , DCT Industrial Trust and Extra Space Storage (EXR - Free Report) . Each of these stocks carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cedar Realty’s FFO per share estimates for 2017 remained unchanged at 54 cents over a month. Its share price has increased 18.0% in the past six months.
DCT Industrial Trust’s current-year FFO per share estimates have been revised upward by a cent to $2.44 in a month’s time. Its share price has increased 16.3% in the past six months.
Extra Space Storage’s 2017 FFO per share estimates have climbed 0.2% to $4.31 in a month’s time. Its share price has increased 12.6% in the past six months.
Note: All EPS numbers presented in this report represent funds from operations (FFO) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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