Why Alexandria Real Estate (ARE) Stocks Are The Best Dividend Stocks For Your Portfolio



Whether it be stocks, bonds, ETFs, or other types of securities, all investors love their portfolios to be profitable. However, when you are a profitable investor, your main goal is to generate a constant cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and of course from dividends. Dividends are the distribution of the company’s profits paid to shareholders; it is often viewed by dividend yield, a metric that measures dividends as a percentage of the current stock price. Many academic studies show that dividends make up the majority of long-term profits, and in many cases, dividend contributions exceed one-third of total profits.

Alexandria real estate promotions in the spotlight

Alexandria Real Estate Equities (ARE), based in Pasadena, operates in the financial sector and so far this year share prices have changed 8.53%. The company currently pays dividends of $ 1.09 per share and a dividend yield of 2.25%. In comparison, the REIT and Equity Trust – Other Industry yield 2.97% and the S&P 500 yield 1.28%.

In terms of dividend growth, the company’s current annual dividend of $ 4.36 is up 2.8% over last year. Over the past 5 years, Alexandria Real Estate Equities has increased its dividend by 5 times on an annualized basis, with an average of 7.17% per annum. Future dividend growth will depend on earnings growth as well as the payout ratio, which is the proportion of the company’s annual earnings per share that it pays out as dividends. Alexandria Real Estate Equities’ current payout ratio is 59%, which means that it has paid 59% of 12 months rolling EPS as dividends.

ARE expects stable earnings growth this fiscal year. The Zacks consensus forecast for 2021 is $ 7.75 per share, with earnings expected to increase 6.16% over the same period last year.

Bottom line

Investors love dividends for many reasons; they significantly increase the return on investment in stocks, reduce the overall portfolio risk and, among other things, have tax advantages. It is important to remember that not all companies pay quarterly benefits.

For example, high-growth firms or tech start-ups rarely provide dividends to their shareholders, while larger, more established companies with more reliable returns are often viewed as better dividend options. During periods of rising interest rates, income investors should be aware that high-yield stocks tend to decline. With this in mind, ARE represents an attractive investment opportunity. Not only is this a strong dividend game, but the stock currently has a Zacks rating of 3 (hold).

Looking for the latest recommendations from Zacks Investment Research? Today you can download the top 7 stocks for the next 30 days. Click to get this free report

Alexandria Real Estate Equities, Inc. (ARE): Free Stock Analysis Report

To read this article on Zacks.com, click here.

Zacks Investment Research


Source link