Zacks_Analysts' Blog : Cousins Properties Declares Dividend - Analyst Blog

Cousins Properties Inc. (CUZ), a Georgia-based real estate investment trust (REIT), has recently declared a first quarter 2012 dividend of 4.5 cents per share or 18 cents on an annualized basis. The dividend is payable in cash on February 23, 2012 to shareholders of record as on February 9, 2012.

Cousins Properties further intends to pay its future dividends in cash, funding the same with revenues from operating activities, proceeds from investment property sales, distributions from unconsolidated joint ventures, and debt.

A steady dividend payout facilitates the long-term strategy of Cousins Properties to provide attractive risk-adjusted returns to its stockholders. Investors looking for high dividend yields are increasingly favoring REITs. Solid dividend payouts are arguably the biggest enticement for REIT investors as the U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends to shareholders.

Cousins Properties has a diversified portfolio with a broad array of product types – office, retail, urban residential and single-family communities that mitigates operating risks associated with the economic down cycles. In 2008, Cousins Properties reorganized its business according to the functional lines and eliminated its division structure, which was primarily based on product types.

Under its new structure, the company has five reportable segments: Office, Retail, Land, Third-Party Management and Multi-Family. The Office and Retail segments comprise operations of consolidated and joint venture office and retail properties, respectively.

The Land segment primarily includes operations for land held for future development. The Third-Party Management segment includes projects where the company manages, leases and develops properties for third parties. The Multi-Family segment includes operations for the development and sale of multi-family real estate.

The spread-out product portfolio has ensured a relatively steady source of revenue generation for Cousins Properties over the years. Furthermore, the portfolio is primarily concentrated in high-growth Sun Belt markets, which due to their long-term demographic trends, should exhibit above-average growth in the coming quarters.

Cousins Properties is currently shoring up its balance sheet and increasing its liquidity by selling non-core assets. At the same time, the company remains focused on leasing activities and intends to maintain steady occupancy levels across its portfolio.

We maintain our Neutral recommendation on Cousins Properties, which currently has a Zacks #3 Rank that translates into a short-term Hold rating. We also have a Neutral rating and a Zacks #3 Rank for Duke Realty Corp. (DRE), one of the competitors of Cousins Properties.