Dividend Growth Stock Overview: Federal Realty Investment Trust

Federal Realty is currently developing the Pike & Rose property in the
Maryland suburbs of Washington, DC.
Photo: MDGovPics/flickr.com.

About Federal Realty Investment Trust

Federal Realty Investment Trust, headquartered just outside of Washington, D.C. in suburban Maryland, owns, operates and redevelops retail and residential real estate. The company’s properties are located in primarily affluent and densely populated areas across 13 states and Washington, D.C., primarily in the northeast and mid-Atlantic areas of the United States, with additional projects in California.

Federal Realty has majority or sole interest in nearly 90 real estate projects with a total of over 20 million square feet. The company selects new property investments based on return on investment, along with the diversification of the tenant base in terms of the types of shops, and balancing between national, regional and local tenants. Other factors include the demographic and economic health of a geographic area, the success of existing investments in the region, and the local competition for real estate and tenants. Current Federal Realty tenants encompass a variety of retail types including supermarkets (e.g., Publix and Giant supermarkets), fashion stores (Ross Dress-for-Less and H&M stores), and general discount retailers (Target).

The top 3 states for Federal Realty projects are Maryland, Virginia and California. Across all Federal Realty projects, the largest tenant accounts for less than 5% of base rent.

The company is a member of the S&P Mid Cap 400 index and S&P’s High Yield Dividend Aristocrats index, and trades under the ticker symbol FRT.

Federal Realty’s Dividend and Stock Split History

 

Federal Realty Trust Dividends

Federal Realty Investment Trust has compounded dividends at about a 4% rate over the last two decades.

Federal Realty has paid quarterly dividends since its founding in 1962 and has increased dividends since 1968. Since 2006, the company has announced annual dividend increases in early August, with the stock going ex-dividend in late September. Federal Realty’s most recent increase was an 4.3% increase in August 2016 to an annualized rate of $3.92. I expect Federal Realty to announce its 50th consecutive year of dividend growth in August 2017.

Federal Realty generally grows its dividend in the low-to-mid single digit percentages. In the 5 years ending in 2016, Federal Realty grew its dividend at a compounded rate of 7.1%. The company’s compounded annual dividend growth rate (CADGR) from 2006 – 2016 was 5.4%, and the 20-year CADGR from 1996 – 2016 was 4.3%.

Federal Realty Inc has split its stock 2-for-1 twice times, in August 1982 and November 1985. A single share of stock purchased prior to August 1982 would have split into 4 shares.

Over the 5 years ending on December 31, 2015, Federal Realty stock appreciated at an annualized rate of 16.48%, from a split-adjusted $67.31 to $144.34. This outperformed both the 10.2% annualized return of the S&P 500 and the 9.0% annualized return of the S&P Mid Cap 400 index during this time.

Federal Realty’s Direct Purchase and Dividend Reinvestment Plans

Federal Realty Inc has both direct purchase and dividend reinvestment plans. You do not need to be a current shareholder to participate in the direct purchase plan, but your initial investment must be a single purchase of at least $250. Once you are enrolled in the plans, you can make additional purchases of at least $25 at your discretion.

The fee structure of the plans is somewhat favorable to investors. Federal Realty pays all fees associated with share purchases under the plans. When you go to sell your shares in the plan, you’ll pay a transaction fee of $15 plus a commission of 10 cents per share.

Helpful Links

Federal Realty Investment Trust’s Investor Relations Website

Current quote and financial summary for Federal Realty Investment Trust (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Federal Realty Investment Trust

 

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