Real estate investment trust Alexandria Real Estate Equities (ARE) will raise its quarterly dividend by another 2.9 percent to $1.06 per share in 2020. This follows a 6.2 percent dividend hike by the REIT last year and will mark 11 consecutive years of increased dividends.
The next dividend is payable on July 15, 2020, to shareholders of record on June 30, 2020. The new annual dividend rate of $4.24 per share yields 2.7% at a stock price of $154.70.
In the press release dated June 1, 2020 the company announces the dividend hike, stating: "The dividend allows the company to share its continued high-quality, strong and increasing net cash provided by operating activities with common shareholders while it retains significant cash provided by operating activities for reinvestment into its highly leased pipeline of development and redevelopment of new Class A properties. The company's funds from operations payout ratio (quarterly common stock dividends divided by quarterly funds from operations) remains favorably low at 58 percent for the three months ended March 31, 2020. Additionally, growth in net cash provided by operating activities after dividends continues to generate opportunities to increase the company's quarterly cash dividend per common share while enabling it to maintain a low funds from operations payout ratio." (source: company press release).
After the dividend was reduced by 56.3 percent in 2009 during the financial crisis, a dividend increase followed each year thereafter. The smallest dividend increase was 4.1% and was announced in 2015. Alexandria Real Estate Equities announced the largest dividend increase of 28.6% in 2010, the year after the dividend cut. The dividend also rose sharply in 2013, when the real estate investment trust increased the dividend by 21.4%.
The share price fell by 4% in 2020. Last year, the ARE price rose by more than 40% and in the last six years the stock price was up by double digits five times, excluding the dividend. The company currently pays about $527 million in dividends to shareholders annually.
Alexandria Real Estate Equities, Inc. is an urban office real estate investment trust (REIT) focused on collaborative life science and technology campuses in AAA innovation cluster locations. Its locations include Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland and Research Triangle. Alexandria Real Estate Equities was founded in 1994 and has paid a dividend every year since 1997.