Sun Communities Inc., a real estate investment trust (REIT) that operates RV parks and manufacturing housing communities across the U.S., was one of 14 REITs named by KBW Inc., a full-service investment bank that specializes in the financial services sector, to its inaugural REIT “Dividend” Honor Roll of superior performers, The Street reported.
Honor Roll winners are publicly-traded REITs with a market capitalization of $500 million or greater that have consecutively increased or maintained regular cash dividends since 2000 and whose 2011 adjusted funds from operations (AFFO) payment ratio is lower than 95%.
KBW found that 14 companies, out of nearly 114 total companies screened, now qualify for inclusion in the KBW REIT “Dividend” Honor Roll.
“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,” noted KBW’s Sheila McGrath, senior vice president for equity REIT research. “For this reason, dividends were the primary selection criteria for the honor roll, and interestingly, the REITs awarded have significantly outperformed both the sector and the overall market in the last decade.”
In terms of stock price performance, REIT Honor Roll companies significantly outperformed both the Morgan Stanley REIT Index (RMS) and the overall stock market for the period 2000-2010.
For the five-year period (2005-2010) the Honor Roll returned 71% vs. 16% and 12% for the RMS and S&P 500, respectively. For the 10-year period (2000-2010) those selected in the Honor Roll returned 424% vs. 173% and 15% for the RMS and S&P 500, respectively.