REITs Worth Bragging About
Of course in REIT-dom, we investors are looking for the best landlords who have a proficiency in one subject matter: paying out dividends . After all, the best kids are generally the ones that have the highest grades and also maintain them consistently.
That's why I wanted to brag about some of the more exceptional REITs -- ones that have earned a reputation for paying out nice fat dividends north of 5% -- and also for producing consistency in the classroom. For the combined attributes of high returns and repeatable income is what I believe "intelligent REIT investing" is all about. Let's take a look at the hard-working bunch.
Medical Properties Trust (MPW) : Birmingham-based Medical Properties Trust turned in an exceptional strong year-end report card. The pure-play hospital landlord reported that its fourth-quarter normalized funds from operations (or FFO) per diluted share was 25 cents, an increase of 32% over 2011 FFO of 19 cents per diluted share. For the full-year 2012, MPW reported 90 cents Normalized FFO per share representing a 27% increase over the 71 cents per share in 2011.
Also, MPW announced that the company had the highest annual acquisition volume recorded as the REIT managed to purchase more than $800 million in investments during 2012, including more than $168 million in the fourth quarter of 2012. MPW paid a 2012 fourth-quarter cash dividend of 20 cents per share, resulting in a dividend payout ratio of a very well-covered 80% of normalized FFO.
MPW has a market capitalization of $1.974 billion, and shares are trading at $14.40 per share. The current dividend yield is 5.56% and the year-over-year total return is 60.36%.
Healthcare Trust of America (HTA) : Scottsdale-based Healthcare Trust of America also turned in an exceptional report card (keep in mind that this is the first year-end earnings report since HTA listed its shares on June 6, 2012). The pure-play medical office building (or MOB) REIT reported its normalized FFO increased by 23.1% to 16 cents per share ($34.2 million) as compared to the fourth quarter of 2011. Also, same-property cash NOI increased by $1.6 million or by 3.8%, compared to the fourth quarter of 2011.
For the full year, HTA reported normalized FFO of 61 cents per share, or $135.3 million, an increase of nine cents per share, or 17.3%, compared to 2011. In addition, HTA announced that Same Property Cash NOI was $172.6 million, an increase of $3.4 million, or 2.0%, compared to 2011. For the year, HTA acquired $294.9 million of high quality on-campus or aligned medical office buildings. The acquisitions totaled over 1.3 million square feet and were over 99% occupied at acquisition. HTA's current occupancy rate is 91.1% of the company's gross leasable area (GLA).