PPS Post Properties, Inc. (delisted)

Post Properties, Inc. (PPS), a real estate investment trust (REIT), has recently declared a third quarter 2012 dividend of 25 cents per share or $1.00 on an annualized basis. The dividend is payable in cash on October 15, 2012, to shareholders of record on September 28.

The quarterly dividend represents a 13.6% year-over-year increase to that paid in the year-ago quarter. Post Properties expects to maintain this dividend payout for the remainder of 2012. Based on the closing price of $50.76, the current dividend yield is fairly decent, at approximately 2.0%.

A steady dividend payout facilitates the long-term strategy of Post Properties to provide attractive risk-adjusted returns to its stockholders. Investors looking for high dividend yields are increasingly favoring REITs like Post Properties. Solid dividend payouts are arguably the biggest enticement for REIT investors as U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends to shareholders.

Post Properties intends to pay its dividends from operating cash flows. The company maintains a conservative dividend payout ratio to maintain an optimum mix of investments to fuel its growth engine as well as to strengthen its balance sheet by reducing debt and increasing its liquidity.  

Headquartered in Atlanta, Georgia, Post Properties develops and operates luxury multi-family apartment communities under the renowned Post brand since its formation in 1971. The company presently operates in 10 markets across the U.S., with ownership interests in 21,982 apartment units in 59 communities. These include 1,471 apartment units in four communities held in unconsolidated entities and 1,810 apartment units in six communities currently under development or in lease-up stage.

We currently have an Outperform recommendation on Post Properties, which retains a Zacks #1 Rank that translates into a short-term Strong Buy rating. However, we have a Neutral recommendation and a Zacks #2 Rank (short-term Buy rating) for Equity Residential (EQR), one of the competitors of Post Properties.

 
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