Tags: Boston | Properties | dividend | BXP

Boston Properties Might See Dividend Hike

By    |   Thursday, 08 Dec 2011 10:39 AM

Real estate investment trust Boston Properties (BXP) is one of the more highly regarded REIT stocks, as indicated by a yield well below most of the company's peers. A look at the financials and dividend history, however, may have investors asking if management will adjust the dividend upward in the near future.

Boston Properties primarily owns office space, with a couple of retail and residential properties in the mix. At the end of the 2011 third quarter the company owned 153 properties located in Boston, Washington, D.C., San Francisco, Manhattan and Princeton, N.J. As a real estate investment trust, Boston Properties is required to pass at least 90 percent of net income through to investors as dividends.

The important figure when evaluating a REIT is funds from operations (FFO), which is net income with non-cash items like depreciation added back in. The FFO is the money a REIT has available for distributions.

For the 2011 third quarter, Boston Properties reported FFO of $1.28 per share, up from $1.08 a year earlier. Projected FFO for the full year is $4.80 per share and management guidance for 2012 is between $4.58 and $4.78.

Dividend possibilities

The current 50 cents quarterly dividend rate from Boston Properties has been in effect since the second quarter of 2009, when the rate was lowered from 68 cents quarterly. The company also breaks out funds available for distribution, which is FFO less other expenses, on the quarterly earnings reports.

The funds available have increased steadily over the last five quarters and the dividends paid have declined from 70 percent of funds available for distribution to 51 percent over the period.

Through the end of 2007, Boston Properties had made one-time special dividend payments at the end of the year if the results for the year warranted the payment. A one-time dividend is another option for management, rather than increasing the regular dividend.

Recently, the analysts at Argus Research reiterated their buy rating on BXP but cut their target price by $15 per share to $105. At the time the stock was trading at about $90 per share.

The company next reports on Jan. 25.

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Real estate investment trust Boston Properties (BXP) is one of the more highly regarded REIT stocks, as indicated by a yield well below most of the company's peers. A look at the financials and dividend history, however, may have investors asking if management will adjust...
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2011-39-08
Thursday, 08 Dec 2011 10:39 AM
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