AvalonBay Downgraded at Cantor Fitzgerald (AVB)

AvalonBay Downgraded at Cantor Fitzgerald (AVB)


Cantor Fitzgerald reported on Friday that they have downgraded real estate investment trust (REIT), AvalonBay Communities, Inc. (AVB) to a “Hold”.

The firm has downgraded AVB from a “Buy” to a “Hold,” and has decreased the company’s price target from $157 to $142. This new price target suggests a 5% increase from the stock’s current price of $134.32.

An analyst from the firm commented, “the adjustments are predicated upon valuation changes: less development NPV (the biggest impact), a higher overall portfolio cap rate, and a lower applied premium. With the Archstone purchase, we also view the company as straying from its core strategy, a move we expect could impact overall portfolio value (e.g., a higher aggregate cap rate) and performance.”

AvalonBay is a REIT that focuses on the development, redevelopment, acquisition, and operation of apartment buildings in ten states in the US. AVB reported net income of $88.6 million, or 89 cents per share, and revenue of $271.9 million during its most recent quarter.

AvalonBay Dividend In Focus

AvalonBay has paid out a quarterly dividend of 97 cents for the last three quarters. The company currently has a 2.85% dividend yield, and an annualized dividend of $3.88. There is an ex-dividend date of December 27 for this stock. The 97 cent dividend will be paid on January 15. (view the Dividend.com Ex-Dividend Tool for information on all upcoming ex-dividend dates).

Recent AvalonBay dividends include:

  • September 26, 2012: $0.97
  • June 29, 2012: $0.97
  • March 28, 2012: $0.97
  • December 28, 2011: $0.89
  • The company’s payout ratio has declined in the past three years, meaning the percentage of earnings AVB pays out in dividends is trending lower.

Year Dividend ($M) Payout Ratio
2009 $546 372%
2010 $302 305%
2011 $323 305%

AvalonBay vs. The Competition

Dividend.com has put several companies in the same category as AVB, which are considered to be direct competition. These companies include Apartment Investment & Management Co (AIV), Equity Residential (EQR), and American Campus Communities (ACC). The chart below shows the dividend yield and DARS™ Rating of AVB’s competitors.

Ticker Company Yield DARS
AVB AvalonBay 3.2% 3.4
AIV Apartment Investment & Management 3.14% 3.3
EQR Equity Residential 2.84% 3.4
ACC American Campus Communities 3.03% 3.4

Use the Dividend.com screener to see all dividend-paying consumer goods stocks, or run other custom searches for dividend-paying stocks.

AvalonBay shares were down -$1.66, or -1.22% during Friday morning trading. The stock is up 3.18% YTD.

AvalonBay Communities, Inc.(AVB) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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