Regular readers of my writings know that I preach that a REIT worth owning should reward investors with regular dividend increases. The typical REIT announces a new, higher dividend once a year, followed by four quarterly payouts at the new rate. Across the REIT world, increases happen every month of the year, but January is a popular month for companies to announce a new dividend rate. A dividend bump often results in a share price increase as investors jump in to earn the new higher income rate.
I maintain a REIT database that includes about 100 REITs with histories of regular dividend increases, and a large number of companies pick January as the month to announce new dividend rates. This article covers those REITs that should announce an increase near the end of January 2016. You can get a jump on the rest of the REIT investing crowd by picking up shares a few weeks before the news comes out.
Aimco (NYSE: AIV), formerly called Apartment Investment and Management Co., owns and operates apartment communities, primarily located in California and the larger East Coast metro areas, such as Philadelphia, Miami, and Atlanta. Over the past few years, the company has been decreasing the number of communities it owns to focus on the higher end of the apartment rental market. Historically, AIV announces a dividend increase at the end of January, with a mid-February record date and late February payment. In 2015, there was a mid-year increase with a new, higher rate announced in April after just one quarter of the new rate. Dividend growth has been in the mid-teens and AIV yields 3.0%.
AvalonBay Communities Inc. (NYSE: AVB), with a $24 billion market cap is one of the largest REITs and apartment-focused REITs. The company has been growing revenues and dividend payments nicely since coming out of the Great Recession. Five-year average dividend growth is 5.4% and in January 2015, the quarterly payout rate was increased by 7.75%. Core FFO per share for the first nine months of 2015 was up 10% compared to the same period in 2014. This points to a similar dividend boost for 2016. Historically, AVB announces a new dividend rate at the end of January with an end of March record date and mid-April pay date. The stock currently yields 2.8% with the final 2015 dividend to be paid in mid-January.
