2017 has been volatile but so far into the year yielded a flat return for REIT investors. If you look at the Vanguard REIT Index Fund (NYSE: VNQ) you see that in 2017 investors have been hot and cold about REITs. The result is a sector that is just above breakeven for the year. Over the same period, the S&P 500 is up over 12%. One way to get capital gains from REITs is to focus on buying those real estate investment trusts that will increase the dividends paid to shareholders.
Most REITs that regularly increase dividends do so once a year, and then pay the new dividend rate for the next four quarters. The timing of dividend increases is not widely known or followed, so if you know a bump in the payout rate of a REIT is coming soon, you can buy shares before the announcement and have a good chance at a nice share price boost when the new rate becomes actual news. One of my income stock analysis techniques is to develop and maintain a database of REITs that tracks the time of year they have historically announced new dividend rates. Currently I have about 130 REITs in the database, and out of those 90 have been increasing their payouts to shareholders.
While these REITs announce new dividend rates once a year, the timing varies. For every month of the year, there are companies that will announce a new rate. Now is the time to look at the REITs that should increase dividends in November. If you buy shares three to four weeks ahead of the dividend announcement you will be ahead of the crowd. The higher rate should produce a share price increase. In the worst case, your yield will go up compared to the current percentage quoted. Here are five REITs that are likely to announce dividend boosts in November.
Acadia Realty Trust (NYSE: AKR) acquires, redevelops and manages retail properties in the nation’s most dynamic urban and street-retail corridors, including those in New York, San Francisco, Chicago, Washington DC, and Boston. Acadia Realty will announce its third quarter earnings results at the end of October. The new dividend rate announcement occurs during the first half of November.
For the last four years, the dividend has been bumped up by one cent, which would be a 3.8% increase on the current $0.26 per quarter dividend. Payment of the new rate starts in January with a December 31 record date. This REIT has also paid a special yearend dividend each of the last three years. AKR currently yields 3.6%.
American Assets Trust, Inc. (NYSE: AAT) owns, operates, acquires and develops retail, office, multifamily and mixed-use properties in high-barrier-to-entry markets in Southern California, Northern California, Oregon, Washington, Texas and Hawaii. This REIT has announced a higher dividend in November of each of the last four years.
In 2016 the new dividend was 4.0% higher than the old payout. It looks like this year’s increase will be about 5%. The next dividend announcement will be around November 1 and have a record date of about December 10. The payment will be just before or just after Christmas. AAT currently yields 2.6%.
DCT Industrial Trust Inc. (NYSE: DCT) acquires, develops, leases and manages bulk distribution and light industrial properties located in distribution markets in the United States. In 2015 DCT again started to increase its dividend since reducing the payout in the financial crisis years of 2008 and 2009.
In 2015 the dividend was increased by 3.5%. In 2016 it was increased by 6.9%. Through the first half of 2017, DCT reported AFFO per share that was 12.0% higher than a year earlier. The current dividend rate is 52% of full year FFO guidance. A meaningful dividend increase is quite possible this year. The last dividend boost was announced on November 2 with a December 23 record date and January 5 payment date. DCT yields 2.1%.
Kimco Realty Corp (NYSE: KIM) owns and manages open air shopping centers. This REIT slashed its dividend in 2009, during the financial crisis, but has increased it every year since then. Kimco has increased the dividend by 7% on average for the last six years, and in 2015 the payout was increased by 5.9%. The company’s adjusted FFO per share was up 2.6% in the first half of 2017 compared to the same period in 2016, so this year’s increase will probably be more modest than in the past.
Kimco announces a new dividend rate at the end of October or in in very early November with record and payment dates in January. KIM currently yields 5.5%.
Kite Realty Group Trust (NYSE: KRG) is engaged in the ownership, operation, acquisition, development and redevelopment of neighborhood and community shopping centers in selected markets in the United States. Kite was forced to slash its dividend rate during the 2007-2008 recession.
The company restarted dividend growth in 2012. The dividend has been increased by 35% since the first quarter of that year and was boosted by 11% last year. I forecast a more moderate 3% to 5% increase this year. In 2016, Kite Realty announced the last dividend increase on November 22, with record and payment dates in January.