Mid-America Apartment Communities’ MAA, also known as MAA, board of directors approved an increase in the company’s quarterly dividend payment. The company will now pay out $1.515 per share, reflecting a hike of 3.1% from the prior dividend of $1.47.
Based on the increased rate, the annual dividend comes to $6.06 per share, marking an increase of 18 cents from the prior dividend. At this new rate, the annualized yield comes at 3.8%, based on the stock’s closing price of $158.56 on Dec. 10. The new dividend will be paid out on Jan. 31 to shareholders of record as of Jan. 15, 2025.
Solid dividend payouts are arguably the biggest enticements for REIT shareholders, and MAA remains committed to the same. The company has a good record of paying out dividends to its shareholders. The recent hike reflects MAA’s ability to generate solid income through its operating platform and high-quality portfolio. It also marks the 15th consecutive year MAA has hiked its dividend. In the last five years, MAA has increased its dividend seven times, and its five-year annualized dividend growth rate is 10.48%. Check Mid-America Apartment’s dividend history here.
Is MAA’s Dividend Sustainable?
MAA’s well-diversified Sun Belt-focused portfolio is poised to benefit from the healthy renter demand in its markets. The favorable in-migration trends of jobs and households in these submarkets and high home ownership costs continue to aid demand. MAA’s technological initiatives and encouraging redevelopment projects are expected to fuel margin expansion, boding well for long-term growth. We project an average physical occupancy of 95.5% for 2024.
MAA enjoys a solid balance sheet, with low leverage and ample availability under its revolving credit facility. As of Sept. 30, 2024, MAA had a strong balance sheet with $805.7 million in combined cash and capacity available under its unsecured revolving credit facility. It had a net debt/adjusted EBITDAre ratio of 3.9 times. In the third quarter of 2024, it generated 95.8% unencumbered net operating income, providing the scope for tapping additional secured debt capital if required. Hence, the company is well-positioned to bank on growth scopes.
Moreover, this REIT’s trailing 12-month return on equity (ROE) highlights its growth potential. The company’s ROE of 8.38% compares favorably with the industry’s 3.57%, reflecting that MAA is more efficient in using shareholders’ funds than its peers.
Backed by healthy operating fundamentals, balance sheet strength and prudent financial management, the company is well-poised to capitalize on growth opportunities and reward shareholders handsomely. Looking at its lower dividend payout (than its industry), its dividend distribution is expected to be sustainable.
Shares of the Zacks Rank #3 (Hold) company have risen 15.5%, outperforming the industry’s growth of 9.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Recent Dividend Increases
On Dec. 9, Alexandria Real Estate Equities, Inc. ARE announced a 1.5% sequential hike in its fourth-quarter 2024 cash dividend payment. Delighting its shareholders, the company will now pay out a dividend of $1.32 per share, up from the $1.30 paid out in the prior quarter. The increased dividend will be paid out on Jan. 15 to shareholders on record as of Dec. 31, 2024. Check Alexandria’s dividend history here.
On Dec. 4, Whitestone REIT’s WSR board of trustees recently declared a monthly cash dividend on its common shares and operating partnership units of 4.5 cents per share for the first quarter of 2025, representing a 9% increase from the previous dividend payout. The increased monthly dividend will be initially paid out on Jan. 14 to its shareholders of record as of Jan. 2, 2025. Check Whitestone REIT’s dividend history here.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Mid-America Apartment Communities, Inc. (MAA) : Free Stock Analysis Report
Whitestone REIT (WSR) : Free Stock Analysis Report
Alexandria Real Estate Equities, Inc. (ARE) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
