Compass Point Expects Agree Reality (ADC) to Increase Dividend by 7.5%
Compass Point reiterated a Buy rating on Agree Realty (NYSE: ADC) with a price target of $31.00. In response to the company's third-quarter earnings, analyst Wilkes Graham raised 2012 and 2013 FFO estimates to $2.05 and $2.21, respectively, from $2.02 and $2.18.
"As accretive acquisitions become tougher to find relative to the company's hurdle rates, management must weigh growth vs returns. However, the company's development pipeline should support $25 million of 10% yielding deliveries per year," said Graham.
"Based on our earnings estimates, the company's highly predictable future stream of cash flows, after principal amortization, can support a $1.72/share dividend based on a 90% CAD payout. This implies a 7.5% dividend increase, within our previously published expectation of a 5-15% increase within the next 12 months," he said.
For an analyst ratings summary and ratings history on Agree Realty click here. For more ratings news on Agree Realty click here.
Shares of Agree Realty closed at $25.24 yesterday, with a 52 week range of $20.61-$26.75.
"As accretive acquisitions become tougher to find relative to the company's hurdle rates, management must weigh growth vs returns. However, the company's development pipeline should support $25 million of 10% yielding deliveries per year," said Graham.
"Based on our earnings estimates, the company's highly predictable future stream of cash flows, after principal amortization, can support a $1.72/share dividend based on a 90% CAD payout. This implies a 7.5% dividend increase, within our previously published expectation of a 5-15% increase within the next 12 months," he said.
For an analyst ratings summary and ratings history on Agree Realty click here. For more ratings news on Agree Realty click here.
Shares of Agree Realty closed at $25.24 yesterday, with a 52 week range of $20.61-$26.75.