DALLAS - NexPoint Residential Trust, Inc. (NYSE:NXRT), a real estate investment trust (REIT), has announced an increase in its quarterly dividend. The board of directors has unanimously approved a new dividend rate of $0.51 per share, which is a 10.3% rise from the previous quarter's distribution. This dividend is slated for payment on December 31, 2024, to shareholders on record as of December 13, 2024.
The increase in the dividend per share marks a significant growth of 147.6% since the company's inception in 2015. This decision reflects the company's ongoing financial performance and commitment to delivering shareholder value.
NexPoint Residential Trust specializes in the acquisition, ownership, and operation of middle-income multifamily properties with potential for added value. The company focuses on strategic locations in large cities and their suburban submarkets, primarily in the Southeastern and Southwestern United States.
This dividend announcement is based on a press release statement issued by the company. The increase is noteworthy for investors as it indicates the company's confidence in its financial stability and future prospects. As a REIT, NexPoint Residential Trust is required to distribute at least 90% of its taxable income to shareholders, and the raised dividend suggests that the company is not only meeting but exceeding this requirement.
Investors often view dividend increases as a sign of a company's strong financial health and a positive outlook on its earnings potential. The announcement from NexPoint Residential Trust may therefore be seen as an encouraging sign for its stockholders.
NXRT is externally advised by NexPoint Real Estate Advisors, L.P. and is listed on the New York Stock Exchange. The company's strategic focus on middle-income multifamily properties aims to leverage the growing demand for residential units in key markets.
In other recent news, NexPoint Residential Trust has reported a net income of $10.6 million, or $0.40 per diluted share, for the second quarter of 2024. The company's total revenue reached $64 million, including an $18.7 million gain from the sale of Radbourne Lake. Despite a 1% decrease in same-store rent, NexPoint maintained a stable occupancy rate of 94.1%.
Raymond James recently upgraded NexPoint Residential Trust from Market Perform to Outperform, setting a new price target of $50.00 for the company's shares. This decision was based on a resurgence of interest in workforce-housing assets, particularly in the Sun Belt region, and positive rent growth trends observed in key markets.
Truist Securities has also adjusted its outlook on NexPoint, raising the price target from $37.00 to $46.00 while maintaining a Hold rating. This revision reflects the company's strategic financial decisions, including upfront payment of refinancing costs. NexPoint will account for approximately $53 million, or $2.01 per share, in debt modification charges as part of its strategy to manage financial obligations more efficiently.
In addition to these developments, NexPoint has made significant strategic financial moves. These include the retirement of $14.6 million of its common stock and a refinancing application for 17 properties with JPMorgan and Freddie Mac. This refinancing initiative is expected to reduce the average interest rate spread to 109 basis points, providing a four-year core earnings benefit of $0.15 to $0.20 per share annually.
InvestingPro Insights
NexPoint Residential Trust's recent dividend increase aligns with its strong track record of shareholder returns. According to InvestingPro data, the company boasts a dividend yield of 4.3% and has demonstrated impressive dividend growth of 10.1% over the last twelve months. This is consistent with an InvestingPro Tip highlighting that NXRT has raised its dividend for 9 consecutive years, underscoring the company's commitment to returning value to shareholders.
The REIT's financial health appears robust, with a market capitalization of $1.1 billion and a price-to-earnings ratio of 12.36, suggesting it may be trading at a reasonable valuation relative to its earnings. This is further supported by an InvestingPro Tip indicating that NXRT is trading at a low earnings multiple, which could be attractive to value-oriented investors.
Moreover, NXRT has shown strong performance, with a one-year price total return of 69.18% as of the latest data. This aligns with another InvestingPro Tip noting the company's high return over the last year, which may interest investors looking for growth potential in the real estate sector.
For those seeking more comprehensive analysis, InvestingPro offers additional tips and insights, with 10 more tips available for NXRT on the platform.
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