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.

YearDividend ($M)Payout Ratio
2009$546372%
2010$302305%
2011$323305%
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.

TickerCompanyYieldDARS
AVBAvalonBay3.2%3.4
AIVApartment Investment & Management3.14%3.3
EQREquity Residential2.84%3.4
ACCAmerican Campus Communities3.03%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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