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Investors are always happy to hear that an owned stock has announced a dividend increase. For income investors, this means a monthly or quarterly increase. However, for investors more concerned about growth, dividend increases also show that a board of directors is confident that the company can grow its future profits and comfortably cover the dividend.
In addition, a dividend increase often makes the stock more attractive to investors, which can cause the share price to rise.
Look at four real estate investment trusts (REITs) that announced dividend increases this week. Two of the REITs have great dividend growth records, while the other two have cut their dividends in recent years:
Innovative Industrial Properties Inc. (NYSE:IIPR) is a San Diego-based, internally managed, diversified industrial REIT specializing in triple-net leases and sale-leasebacks for commercial real estate, with cannabis companies as sole tenants. It also creates loans for cannabis operators in need of financing. It was founded in 2016 and had its initial public offering on December 1 of that year. As of May 2024, Innovative Industrial owned and operated 108 properties with 8.9 million rentable square feet across 19 states, with a weighted average lease term (WALT) of 14.8 years.
Innovative can take advantage of the recently proposed reclassification of cannabis from Schedule I to Schedule III, which will remove it from the classification that includes heroin, LSD and ketamine.
In recent news, on June 10, Innovative Industrial announced that it had purchased a 145,000-square-foot industrial space in Ocala, Florida, for $13 million and entered into a long-term, triple-net lease with a unit of AYR Wellness Inc. (OTC:AYRWF) for 98,000 square feet of space.
On June 14, Innovative Industrial Properties announced a 4.4% increase in its second-quarter dividend from $1.82 to $1.90. The dividend will be made payable on July 15 to shareholders of record at the close of business on June 28.
Over the past five years, Innovative Industrial has increased its quarterly dividend by 143% from $0.78 per share without any cuts or suspensions. The annual dividend of $7.60 per share yields 7.01%.
W. P. Carey Inc. (NYSE:WPC) is a New York City-based diversified net-lease REIT whose single-tenant properties include industrial, warehouse, retail and self-storage units. It was founded in 1973 and recently celebrated its 50th year of real estate investing.
At the end of the first quarter of 2024, WP Carey had 1,282 net leased properties and 89 self-storage properties in 26 countries. The net rental portfolio includes 335 tenants with a WALT of 14.9 years and an excellent occupancy rate of 99.1%. However, the occupancy rate of the self-storage properties was only 90.4%.
One of WP Carey’s goals for 2024 was to acquire more properties and he has succeeded. On June 3, WP Carey announced it had acquired three properties in Arizona. One was a newly built, 300,000-square-foot distribution center costing $40 million; the other two were fitness centers with an existing tenant for $28 million.
To date in 2024, WP Carey has made investments and future commitments worth approximately $700 million.
On June 13, WP Carey announced an increase in its quarterly dividend from $0.865 to $0.87 per share. The dividend will be made payable on July 15 to shareholders of record on June 28. WP Carey also increased its dividend in March, from $0.86 to $0.865 per share.
One caveat: Investors are still smart after WP Carey cut its dividend by nearly 20% from $1.05 to $0.86 per share in December 2023, after a slight increase just a few weeks earlier. The discount is the result of the sale of part of the office portfolio and the privatization of the other offices Net lease office buildings (NYSE:NLOP).
Chimera Investment Corp. (NYSE:CIM) is a New York City-based mortgage REIT (mREIT) that invests in a diversified portfolio of mortgage assets through residential mortgages, non-agency residential mortgage-backed securities (RMBS), commercial mortgage-backed securities (CMBS) , and agency RMBS. Chimera has total assets of $12.5 billion.
In recent news, on May 10, Chimera announced that its Board of Directors had approved a reverse stock split of its common stock at a 1-for-3 ratio. The split began trading on May 22. Outstanding shares were reduced from 241.4 million to 80.5 million. Investors were not happy with the news and the stock fell from over $14 to a low of $11.28 within a month. Since then, the price has partially recovered to a recent close of $11.93.
On June 13, Chimera Investments announced a 6% increase in its quarterly dividend from $0.33 to $0.35 per share.
Investors should note that Chimera’s total return (including dividends) since November 1, 2021 is -60.53%, and the mREIT has cut its dividend four times since 2020.
Real Estate Income Corp. (NYSE:O) is a San Diego-based triple-net lease REIT with more than 15,450 properties in 89 industries and more than 1,500 tenants worldwide. The “Monthly Dividend Company,” as it calls itself, is a member of the S&P 500 and an S&P 500 Dividend Aristocrat, meaning it has consistently paid and increased its dividends for at least 25 years. Realty Income has increased its dividend 126 times since its initial public offering in 1994.
On June 4, Realty Income raised its full-year 2024 FFO guidance from $4.17-$4.29 to $4.19-$4.28 per share and its AFFO from $4.13-$4.21 to $4.15-$4 ,21. Management attributed the increase to improvements in the European investment climate.
On June 11, Realty Income increased its monthly dividend from $0.2625 to $0.2630 per share, payable on July 15 to shareholders beginning July 1. This was the 126th dividend increase since Realty Income’s initial public offering in 1994. The new monthly dividend brings the annualized dividend to $3,156 per share with a yield of 5.9%.
On June 12, Keybanc analyst Upal Rana initiated coverage of Realty Income at Sector Weight. No price target was given.
Realty Income remains one of the safest and most consistent income-oriented REITs you can buy.
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This article Four REITs That Only Increased Dividends originally appeared on Benzinga.com
