Equinix Inc (NASDAQ:EQIX) Reports Earnings, Raises Dividend
EQIX Stock Increases Dividend by 14%
Income investors are no stranger to real estate investment trusts (REITs). But other than office buildings, apartment complexes, and shopping centers, a new type of real estate has started to catch investors’ attention in recent years—data centers. And now, one of the biggest data center REITs just raised its payout to dividend investors.
On Wednesday, February 14 after the closing bell, Equinix Inc (NASDAQ:EQIX) announced that its Board of Directors has declared a quarterly cash dividend of $2.28 per share, representing a 14% increase from its previous payout of $2.00 per share. The raised dividend is payable on March 21, 2018 to shareholders of record as of February 26. (Source: “Equinix Declares Quarterly Dividend on its Common Stock,” Equinix Inc, February 14, 2018.)
REIT Definition: What is a REIT?
Compared to other large real estate stocks, Equinix doesn’t have the longest dividend-paying track record as it only started paying regular dividends in 2015. However, its dividend growth was nothing short of impressive. From its initial quarterly dividend rate of $1.69 per share to today’s $2.28 per share, EQIX stock has increased its payout by 35%. (Source: “Dividends,” Equinix Inc, last accessed February 14, 2018.)
Based on Tuesday’s closing price, Equinix Inc has an annual dividend yield of 2.09%.
Those dividend hikes were backed by a growing business. Equinix also reported earnings on Wednesday. In full year 2017, the company generated $4.4 billion of revenue, up 21% year-over-year. Adjusted funds from operations (AFFO), a critical measure of a REIT’s performance, grew 33% from the previous year to $1.44 billion. (Source: “Equinix Reports Fourth Quarter and Full Year 2017 Results,” Equinix Inc, February 14, 2018.)
Going forward, management expects the REIT to grow its AFFO by another 14% to $1.64 billion in full year 2018. With an increasing amount of cash generated from its operations, Equinix is well-positioned to continue raising its dividends.