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Equity Residential (EQR) Announces 6.2% Hike in Dividend

Zacks Equity Research
·4-min read

Equity Residential EQR has announced an increase in its first-quarter 2019 dividend. The company will now pay 60.25 cents per share, which reflects a hike of 6.2% from the prior dividend of 56.75 cents.

Based on the hiked rate of 60.25 cents for the quarter, the annual dividend comes to $2.41 per share. This new dividend will be paid out on Apr 13 to the company’s shareholders of record on Mar 23, 2020. At this new rate, annualized yield comes in at 3.44%, based on the stock’s closing price of $70.01 on Mar 12.

This residential REIT also announced that its annual meeting of shareholders will be held on Jun 25 in Chicago, IL.   

The latest raise reflects Equity Residential’s ability to generate a solid cash flow through its operating platform and high-quality portfolio. With the current cash flow growth rate of 23.84%, ahead of its industry’s average of 15.08%, the increased dividend is likely to be sustainable.

Earlier in January, the company reported fourth-quarter 2019 normalized funds from operations (FFO) per share of 91 cents, surpassing the Zacks Consensus Estimate of 89 cents. Moreover, normalized FFO per share figure was 8.3% higher than the 84 cents reported in the year-ago quarter. Results mirrored improved same-store net operating income and growth in average rental rate.

Notably, Equity Residential is poised for growth amid job-market gains, favorable demographics, lifestyle transformation and creation of households. Furthermore, the company is anticipated to benefit from its portfolio-repositioning efforts in high barrier-to-entry/core markets.

The company has a proven track record of opportunistic acquisitions, timely dispositions and focused development. Moreover, on the capital front, it is actively capitalizing on the favorable environment. In November, Equity Residential fortified its financial position by entering into a $2.5-billion multi-currency revolving credit facility, replacing its prior $2-billion credit agreement. The company also expanded the maximum scale of its unsecured commercial paper note program from $500 million to $1 billion. Such strategic measures are aimed at strengthening the company’s outstanding balance sheet, liquidity and financial flexibility.

However, new apartment supply across its markets might partly impede the company’s growth momentum in the future, straining lease rates, occupancy and retention as well as offering high concessions.

Shares of this Zacks Rank #3 (Hold) company have declined 6.7% over the past year compared with the industry’s growth of 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



Stocks to Consider

Boston Properties BXP currently carries a Zacks Rank #2 (Buy). The company’s FFO per share estimate for first-quarter 2020 has been revised 1.1% upward to $1.82 in two months’ time.

Highwoods Properties’ HIW currently carries a Zacks Rank of 2 and the Zacks Consensus Estimate for the current-year FFO per share has moved marginally upward to $3.64 over the past month.

Piedmont Office Realty Trust PDM is currently Zacks #2 Ranked. The company’s FFO per share estimate for 2020 has been revised 3.2% upward to $1.96 in two months’ time.

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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Highwoods Properties, Inc. (HIW) : Free Stock Analysis Report
 
Boston Properties, Inc. (BXP) : Free Stock Analysis Report
 
Equity Residential (EQR) : Free Stock Analysis Report
 
Piedmont Office Realty Trust, Inc. (PDM) : Free Stock Analysis Report
 
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Zacks Investment Research