Mid-America Apartment Communities Vs. W. P. Carey: Why One REIT Dividend Claimed 86% Of Core AFFO
The Print Mid-America Apartment Communities (NYSE: MAA ) paid a dividend equal to 86% of second-quarter Core AFFO. W. P. Carey (NYSE: WPC ) paid 70% of its reported AFFO. MAA reported Core AFFO of $1.77 a share on July 29, down from $1.85 a year earlier, and held its quarterly dividend at $1.530. W. P. Carey reported AFFO of $1.34 on July 28, up 4.7% from $1.28, and lifted its dividend 4.4% to $0.940. Both dividends were covered on the measure each company reports. The distance between the two payout ratios was 16 percentage points. MAA leases Sunbelt apartments that reprice annually. W. P. Carey holds net-lease property on long contracted terms. The comparison is not which portfolio is better positioned. It is how much each dividend leaves behind. MAA Held Its Adjusted Guidance. New Lease Pricing Fell 5.3% MAA cut its GAAP net-income guidance but held the midpoint of Core AFFO guidan...
The Print Mid-America Apartment Communities (NYSE: MAA ) paid a dividend equal to 86% of second-quarter Core AFFO.
W.
P.
Carey (NYSE: WPC ) paid 70% of its reported AFFO.
MAA reported Core AFFO of $1.77 a share on July 29, down from $1.85 a year earlier, and held its quarterly dividend at $1.530.
W.
P.
Carey reported AFFO of $1.34 on July 28, up 4.7% from $1.28, and lifted its dividend 4.4% to $0.940.
Both dividends were covered on the measure each company reports.
The distance between the two payout ratios was 16 percentage points.
MAA leases Sunbelt apartments that reprice annually.
W.
P.
Carey holds net-lease property on long contracted terms.
The comparison is not which portfolio is better positioned.
It is how much each dividend leaves behind.
MAA Held Its Adjusted Guidance.
New Lease Pricing Fell 5.3% MAA cut its GAAP net-income guidance but held the midpoint of Core AFFO guidance at $7.50.
The company lowered its full-year net income per share range to $3.96—$4.20 from $4.18—$4.50.
That figure includes real estate depreciation and other items excluded from Core FFO and Core AFFO.
The release did not itemize what drove the reduction.
Full-year Core AFFO was narrowed to $7.38—$7.62 from $7.34—$7.66, and Core FFO held an $8.53 midpoint on the same narrowing.
The GAAP range fell 26 cents at the midpoint while both adjusted midpoints were unchanged.
Same-store revenue fell 0.3% year over year and same-store net operating income declined 1.0%.
Occupancy held at 95.3% even as new-lease pricing fell 5.3%.
Renewal pricing rose 5.2%, keeping the blended rate positive at 0.7%.
The quarter shows occupancy holding while the pricing pressure sits on new leases.
Core FFO was $2.08 for the quarter and Core AFFO was $1.77.
MAA deducted 31 cents of recurring capital expenditure between the two measures.
Against Core FFO, the $1.530 dividend is a 74% payout.
Against Core AFFO, it is 86%.
The two periods give two readings.
Against the $7.50 full-year midpoint, the $6.12 annualized dividend runs about 82%, leaving roughly $1.38 a share of annual cushion.
On the quarter just reported, the cushion was 24 cents.
MAA repurchased $50 million of stock during the quarter, about 0.4 million shares at an average of $130.66, and funded roughly $81 million of development.
Net debt to adjusted EBITDAre was 4.5 times on $5.7 billion of total debt.