Although impressive third-quarter earnings, an improved job market, and rising consumer spending helped benchmark equity indexes hit fresh highs last month, historically-high inflation rates and the Federal Reserve’s decision to begin tapering its bond-buying later this month have been fostering market volatility of late.
Since real estate investment trusts (REITs) must distribute most of their income as dividends, they are coveted for the steady income stream they provide when the market is volatile. Also, they offer a cushion to one’s portfolio during an inflationary period. Investors’ interest in this space is evident in the ALPS Active REIT ETF’s (REIT) 14.3% returns over the past six months, versus SPDR S&P 500 Trust ETF’s (SPY) 12.2% gains.
Given this backdrop, we think it could be wise to bet on the shares of fundamentally-strong REITs Brixmor Property Group Inc. (BRX), Apollo Commercial Real Estate Finance, Inc. (ARI), Urstadt Biddle Properties Inc. (UBA), and Cedar Realty Trust, Inc. (CDR). These REITs have impressive dividend payout histories.
Brixmor Property Group Inc. (BRX)
BRX is a real estate investment trust (REIT) that owns, manages, leases, acquires, disposes, and redevelops retail shopping centers through Brixmor Operating Partnership LP and subsidiaries (collectively, the Operating Partnership). Its portfolio of 395 retail centers comprises approximately 69 million square feet of prime retail space in established trade areas.
BRX has announced that it will pay a $0.24 quarterly cash dividend on January 18, 2022. The stock pays an $0.86 per share dividend annually, which translates to a 3.49% yield. Its dividend has grown at a 5.7% rate over the past four years.
For its fiscal third quarter, ended September 30, 2021, BRX’s total revenues increased 14.3% year-over-year to $290.19 million. The company’s net income came in at $46.15 million for the quarter, marking a 65.1% year-over-year improvement. Its EPS improved 66.7% year-over-year to $0.15. The company had cash and cash equivalents of $397.20 million as of September 30, 2021.
Analysts expect BRX’s EPS to improve 78% year-over-year to $0.73 in the current year. A $1.13 billion consensus revenue estimate for the current year represents a 7% rise from the prior-year period. It surpassed the Street’s EPS estimates in each of the trailing four quarters.
The stock has gained 26.2% in price over the past nine months and 4.9% over the past month. BRX closed yesterday’s trading session at $24.64.
BRX’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has a B grade for Growth. Click here to see the additional ratings for BRX (Momentum, Sentiment, Quality, Stability, and Value).
Of the 35 stocks in the REITs – Retail industry, BRX is ranked #4.
Apollo Commercial Real Estate Finance, Inc. (ARI)
ARI is a REIT that originates, acquires, invests in, and manages commercial first mortgage loans and mortgage-backed securities, subordinate financings, and other commercial real estate-related debt investments. The company identifies opportunities within its target assets through its manager and its affiliates and its platform to provide risk-adjusted returns to its stockholders over the long term, primarily through dividends and secondarily through capital appreciation. It is externally managed and advised by ACREFI Management, LLC.
ARI paid a $0.35 quarterly cash dividend on October 15, 2021. The stock pays a $1.40 per share dividend annually, which translates to a 9.42% yield. The company’s dividend has grown at an 11.8% rate over the past four years.
For the third quarter, ended September 30, 2021, ARI’s net income increased 22.4% year-over-year to $60.39 million. Its EPS increased 22.6% year-over-year to $0.38. ARI had $243.41 million in cash and cash equivalents as of September 30, 2021.
Analysts expect ARI’s EPS to improve 166.7% year-over-year to $0.75 for the current year. The stock’s EPS is expected to grow at a marginal rate per annum over the next five years.
ARI has gained 17.6% in price over the past nine months but lost 1.2% over the past month. The stock ended yesterday’s trading session at $14.86.
ARI’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. Click here to see the additional ratings for ARI.
ARI is ranked #5 of 29 stocks in the REITs – Mortgage industry.
Urstadt Biddle Properties Inc. (UBA)
UBA acquires, owns, and manages commercial real estate. The company owns or has equity interests in 81 properties, including neighborhood and community shopping centers, office buildings, single-tenant retail or restaurant properties, and office/retail mixed-use properties.
UBA paid a $0.23 quarterly cash dividend on October 15, 2021. The stock pays a $0.92 per share dividend annually, which translates to a 4.45% yield. Its dividend has grown at a 5.4% rate over the past four years.
On June 28, 2021, UBA completed the $13.35 million sale of its Newington Park Shopping Center, located in Newington, N.H., to a subsidiary of Torrington Properties, Inc., a real estate investment and development company. The company intends to deploy the sale proceeds into regional properties to add greater value there.
For the fiscal third quarter, ended July 31, 2021, UBA’s total revenues increased 19.2% year-over-year to $34.33 million. The company’s operating income came in at $13.76 million, indicating a 52.2% increase from the prior-year period. While its net income increased 282.8% year-over-year to $22.68 million, its earnings per Class A share grew 1100% to $0.48. UBA had $22.99 million in cash and cash equivalents as of July 31, 2021.
Analysts expect the stock’s EPS to grow 55.1% year-over-year to $0.76 in the current year. A $137.55 million consensus revenue estimate for the current year represents an 8.5% rise from the prior-year period. Analysts expect the stock’s EPS to grow at a rate of 4% per annum over the next five years.
UBA has gained 34.4% in price over the past nine months and 4.6% over the past month. The stock ended yesterday’s trading session at $20.68.
It is no surprise that UBA has an overall A rating, which equates to Strong Buy in our POWR Ratings system.
The stock has a B grade for Growth, Stability, and Sentiment. Click here to see the additional ratings for UBA (Quality, Momentum, and Value).
UBA is ranked #1 of 35 stocks in the REITs REITs – Retail industry.
Cedar Realty Trust, Inc. (CDR)
CDR is a fully-integrated REIT that focuses on the ownership, operation, and redevelopment of grocery-anchored shopping centers in high-density urban markets. The company’s portfolio comprises 54 properties, with approximately 8.1 million square feet of gross leasable area.
CDR is scheduled to pay a $0.07 quarterly cash dividend on November 22, 2021. The stock pays a $0.26 per share dividend annually, which translates to a 1.13% yield. Its dividend has grown at a 6.9% rate over the past four years.
On May 6, 2021, CDR, Asland Capital Partners, and the Goldman Sachs Group, Inc.’s (GS) Urban Investment Group formed a joint venture to construct the first phase of Northeast Heights, a mixed-use office and retail development in the Minnesota/Benning submarket of Washington D.C.’s Ward 7 neighborhood. The joint venture will work to lease the remaining retail space to retailers that benefit tenants of the office building and bring necessary amenities and services to the area.
As of September 30, 2021, the company had $4.73 million in cash and cash equivalents. CDR’s EPS is expected to grow at a rate of 11% per annum over the next five years. The stock has gained 84.4% in price over the past nine months and 6.3% over the past month. The stock ended yesterday’s trading session at $23.35.
CDR’s POWR Ratings reflect its solid prospects. CDR has a B grade for Sentiment. In addition to the POWR Ratings grades we have just highlighted, one can see CDR’s Value, Momentum, Quality, Growth, and Stability grade here.
CDR is ranked #23 of 35 stocks in the REITs – Retail industry.
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BRX shares were trading at $24.36 per share on Tuesday afternoon, down $0.28 (-1.14%). Year-to-date, BRX has gained 53.66%, versus a 26.99% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...
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