As a dividend focused stock analyst, I put less emphasis on short term share price fluctuations and more on dividend yields and dividend growth prospects. When the market turns volatile, such as what we have experienced in the last several weeks, it is good to go back to the basics of dividend investing, which for me is dividend growth. A growing payout should, over time result in a higher share price. One nice way to get a quick start to capital gains from dividend growth is to buy shares just before an announced dividend increase.
I maintain a database of about 130 REITs, which I use to track yields and dividend growth. The typical REIT increases its dividend rate once a year, at about the same time each year. Across the REIT universe, the dividend increase announcements come in almost every month of the year. Each month I like to cover the REITs on my list that have historically increased their payouts in the following month. You can use this information to establish longer term positions in stocks with growing dividends or try for the short-term capital gain that often occurs when a dividend increase is announced. Here are three potential REIT dividend increases for March.
Taubman Centers, Inc. (NYSE: TCO) acquires, develops, owns and operates regional and super-regional shopping centers. The company has grown its dividend by a 6% annual compound growth rate for the last 10 years. The payout rate was boosted by 5.0% last year. Despite a challenging retail environment in 2017, the company was able to generate growth in all its key financial metrics.
The current dividend rate is 66% of 2018’s FFO/share cash flow guidance, so a moderate dividend increase is probable to keep the growth track record going.
I forecast a 4% to 5% increase in the quarterly payout. Taubman Centers should announce the new dividend rate in early March. TCO yields 4.1%.
UDR, Inc. (NYSE: UDR) owns and operates multi-family apartment complexes. The company increased its dividend by 5.1% last year and has averaged annual dividend growth of 7.1% over the last five years. Adjusted FFO per share was up 5.5% for 2017.
Apartments have recently been viewed as a hot REIT sector that is slowing. Despite lower investor expectations, recent results from other apartment REIT have reported continued above average growth.
UDR should announce its new dividend rate in the second half of March. UDR yields 3.6%.
InfraREIT Inc. (NYSE: HIFR) is a REIT that owns electric power transmission and distribution assets in Texas. The company came to market with a January 2015 IPO. After its first year, the HIFR dividend was boosted by 11.1%. The dividend was not increased in 2017, even though revenues and cash flow were up in the high single digits.
During last year, the company ran into regulatory issues and was forced to exchange some assets. I expect the company will return to dividend growth in 2018 A high single digits dividend increase is very possible.
The next dividend announcement will be in early March, with an end of March record date and payment around April 20. HIFR currently yields 5.2%.The #1 Stock to Retire on (Over $1 million in income up for grabs)
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