KBW Inc., New York, on Monday placed 14 real estate investment trusts in its first ever 'REIT Dividend Honor Roll.'
To qualify, the REITs needed to have a market capitalization of at least $500 million, maintained or increased a regular cash dividend since 2000, and carried an adjusted funds from operation payment ratio lower than 95% for 2011.
The REITS on the list are: Public Storage, Corporate Office Properties Trust, Essex Property Trust Inc., PS Business Parks, Inc., Taubman Centers Inc., AvalonBay Communities Inc., Realty Income Corp., Federal Realty Investment Trust, Tanger Factory Outlet Centers Inc., Urstadt Biddle Properties Inc., National Retail Properties Inc., Sun Communities Inc., Health Care REIT Inc., and Mid-America Apartment Communities Inc.
"While there is a tremendous amount of focus by REIT investors on net asset value creation, we continue to believe, over time, dividends are a particularly relevant weighing mechanism and ultimately a key factor for investing in the sector," explained KBW's Sheila McGrath, senior vice president, equity REIT research. "For this reason, dividends were the primary selection criteria for the Honor Roll, and interestingly, the REITs awarded have significantly outperformed in both the sector and the overall market in the last decade."
For the five-year period between 2005 and 2010, the Honor Roll returned 71% vs. 16% and 12% for the Morgan Stanley REIT Index and S&P 500, respectively. For the 10-year period between 2000 and 2010, those selected in the Honor Roll returned 424% vs. 173% and 15% for the Morgan Stanley REIT Index and S&P 500, respectively.
