SL Green Rewards Investors With Dividend Hike: Is it Sustainable?

SL Green Realty’s SLG board of directors has announced a 3% hike in the annual ordinary dividend for its common stock, bringing the total to $3.09 per share. As a result, SLG will now pay out a monthly cash dividend of 25.75 cents per share, up from the 25 cents that will be paid this month.The increased amount will be paid out on Jan. 15 to shareholders on record as of Dec. 31, 2024. Based on the increased rate, the annual dividend comes to $3.09 a share, resulting in an annualized yield of 4.11%, considering SL Green’s closing price of $75.16 on Dec. 6.Per Matt DiLiberto, chief financial officer of the company, "We are proud to reward our shareholders with an increase in our ordinary dividend as earnings and taxable income grow amid the backdrop of the best performing office market in the country."Earlier, on Nov. 18, SL Green’s board of directors announced a monthly ordinary dividend of 25 cents per share on its common stock. The dividend will be paid out on Dec. 16 to shareholders of record as of Nov. 29, 2024.Solid dividend payouts are the biggest enticements for REIT investors, and SL Green is committed to boosting its shareholder wealth. SL Green has increased its dividend four times in the last five years with payout ratio of 43%.SLG’s Fundamentals Support Sustainable Dividend PayoutWith long-term leases from tenants with a strong credit profile, it is well-poised to generate stable rental revenues over the long term. Also, its focus on divesting its mature and non-core assets in a tax-efficient manner and using the proceeds to fund development projects and share buybacks is encouraging.Despite the overall choppiness in the office real estate sector, SL Green is well-poised for growth, given tenants’ healthy demand for premier office spaces with class-apart amenities. Hence, with a solid operating platform, we expect the latest dividend rate to be sustainable.Shares of this Zacks Rank #3 (Hold) company have gained 40.7% over the past six months, outperforming the industry’s growth of 13%. Image Source: Zacks Investment Research Stocks to ConsiderSome better-ranked stocks from the broader REIT sector are CareTrust REIT CTRE and OUTFRONT Media OUT, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for CareTrust’s 2024 FFO per share is pinned at $1.50, suggesting year-over-year growth of 6.4%.The Zacks Consensus Estimate for OUTFRONT’s 2024 FFO per share stands at $1.73, indicating an increase of 5.5% from the year-ago reported figure.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SL Green Realty Corporation (SLG): Free Stock Analysis Report CareTrust REIT, Inc. (CTRE): Free Stock Analysis Report OUTFRONT Media Inc. (OUT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks