4 REITs Increasing Dividends In February
The four stocks detailed here have long histories of hiking their dividend each year, and are rock solid additions to every income investing portfolio. As a company that raises distributions each year pays many more benefits than just the extra cash in your pocket.
One of the best events for income investors to enjoy is when a company declares a new, higher dividend rate. A dividend increase provides several positive reactions besides just a larger cash deposit into your brokerage account.
- A dividend increase announcement can produce a nice share price increase. If you buy into a stock before a new, higher dividend rate is announced you can often end up with a quick and tidy gain compared to your entry price.
- Dividend increases are the surest sign that a company’s dividend is safe. Quality dividend paying companies will not declare a higher dividend rate unless they are very certain that the company will generate enough cash flow over the next year.
- A multi-year stretch of regular dividend increases will result in a yield on investment much higher than your initial yield rate and generate an income cash flow that can be used for reinvestment or as a source of personal income.
Many real estate investment trusts – REITs – have histories of steady annual dividend growth. Also, although a dividend increase can be announced any time during the year, quite a few REITs will increase their dividend rate with or near the fourth quarter earnings announcements which happen in January through March each year.
Listed below are four REITs that should announce dividend increases during the next month. Before I provide that list, consider the example of healthcare REIT Ventas, Inc. (NYSE: VTR), a core holding in The Dividend Hunter portfolio which has a history of an average annual 9% increase in its dividend, and the new rate announced every December. The VTR share price started climbing soon after the third quarter dividend was paid at the end of September. Investors who knew the dividend hike was coming were able to pick up a 20% share price gain over the last 2 1/2 months.
Here are four REITs to look at before the end of January to profit from the effects of February dividend hike announcements:
Weingarten Realty Investors (NYSE:WRI) typically makes a dividend announcement in mid-February with the dividend rate that will be paid for the next four quarters. Weingarten Realty owns and leases shopping centers. Last year, the quarterly dividend was increased by 6.5%. A nice special dividend was paid in December, which indicates that last year’s dividend rate came up short of the legally required REIT percentage payout. The increase could be significantly higher than 6.5% this year. WRI currently yields 3.45%.
Home Properties, Inc. (NYSE:HME) owns apartment buildings and historically has announced a dividend increase during the first week of February, with the dividends paid later in the month. Last year the HME quarterly dividend was increased by 4.3%. That was the fourth consecutive annual increase. HME currently yields 4.0%.
With a few exceptions, Public Storage (NYSE:PSA)announces a new, higher dividend rate with its fourth quarter earnings announcement on February 20. The last dividend increase of 12% came one quarter early with the 2013 third quarter earnings announcement. The current rate has been paid for five consecutive quarters, so PSA is very due for a dividend increase. Historically, this large-cap, self-storage properties owning REIT has grown dividends by more than 10% each year. PSA yields 2.75%.
Digital Realty Trust, Inc. (NYSE:DLR) announces its March dividend payment on the 11th or 12th of February. DLR owns and operates data storage centers, a fast growth sector of the commercial real estate space. Last year, in February, Digital Realty increased its dividend by 6.4%. The DLR shares currently yield 4.5%.
Remember that the upcoming dividend increases will result in a higher actual yield on your investment. The yields quoted above are based on the current dividend rates.
Disclosure: I currently do not have positions in the stocks discussed here. I hold positions in several high yield MLPs as part of the more