Why Federal Realty Investment Trust is a Solid Long Term Dividend Stock
When it comes to investing in the stock market, there are many parts that one can take. While buying and selling shares by the day works for some, others prefer to take a more long term approach. So-called income investors are looking to find reliable companies that they can hang on to for quite some time while receiving a per share dividend that keeps coming to them year after year. It is not desirable to buy a stock in anticipation of a dividend, only to have that possibility dissipate after a few quarters payments. Income investors are looking for as sure a thing as possible, and that is what they will find with Federal Realty Investment Trust. Continue reading to learn why this company has become such a solid dividend stock for the long term.
The Company
When you first go to purchase a stock, it is first beneficial to learn a bit about the company, where they have been, and where they are headed. In short, you are interested not only in their current and historical performance but also in their potential for future growth. This is critically important. With that in mind, it is helpful to know that Federal Realty Investment Trust is focused on the commercial real estate property. In fact, they are a large investment trust centered in the United States and they currently have a total equity value of a staggering $9.8 billion. This indicates that they have some cash with which to pay some dividends, but we will get to their history of doing so in a moment.
Federal Realty Investment Trust was actually established back in 1962. This makes it one of the oldest Real Estate Investment Trusts that is publicly traded in the United States. At the close of a recent quarter, Federal Realty Investment Trust possessed a portfolio that includes 105 different properties. Most of these would be retail oriented. This gives the trust a total of 24.2 million square feet of commercial property. These are located in the following eight core markets scattered across the country: Silicon Valley, Los Angeles, Miami, Washington D.C., Philadelphia, New York, Boston, and Chicago. As you can see, these are major populated areas around the country, giving Federal Reality Investment Trust a competitive advantage over others in the industry.
Federal Realty Investment Trust is largely focused on investing its funds in different large metropolitan markets around the country. Each city is positioned for population growth over time, and each has above-average family incomes when compared to the rest of the country. They are most heavily centered in the Washington D.C. Metro area, with Chicago being the area where they have the smallest number of commercial properties.
At the current time, Federal Realty Investment Trust has a portfolio that brings it just under 3,000 tenants. This is quite impressive. The largest tenant is TJX Companies, which provides 2.7 percent of the annual base rent that Federal Realty Investment Trust. A further sign of solid income potential is reflected in the fact that the top tenants for Federal Realty Investment Trust account for only 15.8 percent of the total income from rentals that they receive. This indicates that the trust has a knack of attracting tenants of all sizes, and they have successfully been able to do so since their foundation.
A Summary of Important Dividend and Financial Information
If you are looking for a quick synopsis of Federal Reality Investment Trust in order to determine why they are such a solid stock to invest in, here it is. Federal Realty Investment Trust has long been a strong choice for income investors looking in the REIT market. As a real estate trust, the company has proven itself as a company that pays out dividends on an annual basis, and that the amount of those dividends will grow over time. This has all been accomplished with a balance sheet that is rated investment grade.
Federal Realty Investment Trust has added new developments to its portfolio in recent years. Every Metropolitan area that it currently has properties in continuously has new developments starting up every year. This adds more property-related income to its portfolio on an ongoing basis, and this is slated to effectively increase the net asset value of Federal Reality Investment Trust into the future. One potential drawback is that shares in Federal Realty Investment Trust are not valued cheaply. It will cost you a bit to get involved, but a profitable real estate trust does tend to come with a premium attached. You will find that the current yield for Federal Realty Investment Trust is 3.1 percent, which is quite attractive.
Growth Potential
It should also be noted that Metropolitan has seen its portfolio increase 6 percent annually since 2010. This bodes very well moving forward. In fact, it is outperforming other large real estate investment trusts dating back to 2005. It continues to focus on new acquisitions, so this will likely continue into the future. Federal Realty Investment Trust was actually established back in 1962. This makes it one of the oldest Real Estate Investment Trusts that is publicly traded in the United States. At the close of a recent quarter, Federal Realty Investment Trust possessed a portfolio that includes 105 different properties. Most of these would be retail oriented. This gives the trust a total of 24.2 million square feet of commercial property. These are located in the following eight core markets scattered across the country: Silicon Valley, Los Angeles, Miami, Washington D.C., Philadelphia, New York, Boston, and Chicago. As you can see, these are major populated areas around the country, giving Federal Reality Investment Trust a competitive advantage over others in the industry.
The Bottom Line
Federal Realty Investment Trust is currently paying out a per share dividend of $4.08. It has increased the amount of its dividend every year dating back to at least 2003. This is a stock that has solid long term income potential, so it is worthy of your consideration.
