Zachs Investment Research has marked Pasadena-based Alexandria Real Estate Equities Inc, a local investment firm and developer of life science campuses, as a “compelling investment opportunity” that could ensure consistent cash flow for income investors.
In a report published Monday, Zachs said Alexandria, listed as ARE on the New York Stock Exchange, is a finance stock that has seen a price change of -7.48 percent so far this year. The life science real estate company is paying out a dividend of $1.03 per share at the moment, with a dividend yield of 2.76 percent compared to the REIT and Equity Trust-Other industry’s yield of 5.17 percent and the S&P 500’s yield of 2.2 percent, the report said.
“Taking a look at the company’s dividend growth, its current annualized dividend of $4.12 is up three percent from last year. Over the last five years, Alexandria Real Estate Equities has increased its dividend five times on a year-over-year basis for an average annual increase of 7.06 percent,” the report reads.
“Any future dividend growth will depend on both earnings growth and the company’s payout ratio,” the report continues.
A payout ratio is the proportion of a firm’s annual earnings per share that it pays out as a dividend. Right now, Alexandria Real Estate Equities’ payout ratio is 59 percent, which means it paid out 59 percent of its trailing 12-month EPS (earnings per share) as dividend, Zachs said.
Zachs added that Alexandria is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $7.15 per share, with earnings expected to increase 2.73 percent from the year ago period, the report continued.
Alexandria’s stock currently sits at a Zacks Rank of 3 or Hold.
Founded in 1994, Alexandria Real Estate Equities is classified as an urban office real estate investment trust (REIT) with particular focus on collaborative life science and technology campuses. The company’s assets are located in the AAA innovation cluster locations of North America, with considerable market presence in Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland, and Research Triangle.
As of Dec 31, 2019, the company held a portfolio of 39.2 million square feet in North America. This included 27 million rentable square feet (RSF) of operating properties. Further, the company has 2.1 million RSF of Class A properties going through construction.
The company has 6.3 million RSF of near-term and intermediate-term development and redevelopment projects, and 3.8 million SF of future development projects. Alexandria also provides strategic capital to transformative life science and technology companies through its venture capital arm.
For more information, visit www.are.com.