CapLease, Inc. (LSE), a real estate investment trust (REIT), has recently increased its quarterly dividend from 7 cents to 7.5 cents per share. This translates to a 7.0% increase from the prior-quarter dividend payout. The dividend is payable on January 15, 2013 to shareholders of record on December 31, 2012.
CapLease has increased the overall dividend payout by over 15% during 2012, including an 8% increase in the last quarter. The dividend hike was primarily driven by the company’s significant progress in the last one-year period, including new investments of over $165 million. The company is continuously improving its portfolio and has positioned itself to raise dividends in a very challenging environment.
CapLease expects to distribute excess cash to shareholders through the increased dividend and concurrently look to maintain its cash flow for further reinvestments. Solid dividend payouts are arguably the best enticement for REIT investors as U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividend to shareholders.
At the end of third quarter 2012, cash and cash equivalents stood at $40.2 million. We believe that the company has enough cash to provide optimum shareholder value. The company has a flexible balance sheet and is well-positioned to take advantages of investment opportunities in the future.
CapLease is focused on financing and investing in commercial real estate that is net-leased primarily to single tenants with investment grade or near investment grade credit ratings. It provides private and corporate owners of net-lease real estate with equity, debt, and mezzanine financing option.
CapLease currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We have a long-term Neutral recommendation on the stock. One of its competitors, Lexington Realty Trust (LXP) holds a Zacks #3 Rank.