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WASHINGTON - Easterly Government Properties, Inc. (NYSE:DEA), a real estate investment trust (REIT) that focuses on properties leased to U.S. Government agencies, has announced a reduction in its quarterly dividend and approved a reverse stock split. The company's Board of Directors has approved a dividend cut of $0.085 per share, a decrease of approximately 32.0% from the previous quarter's dividend of $0.265 per share. This adjustment comes as the stock has experienced significant pressure, with InvestingPro data showing a 27.2% decline over the past six months. Despite the reduction, the company maintains a substantial dividend yield of 11.52%.
The new dividend strategy aims to align Easterly with the best practices of other net lease REITs, targeting a Core Funds from Operation (Core FFO) payout ratio between 55-65% and a CAD payout ratio of 65-75%. Darrell Crate, President and CEO of Easterly, stated that the adjusted payout ratios are designed to generate capital for the company's growing pipeline of opportunities. According to InvestingPro analysis, the company maintains a Fair financial health score, with revenue growing at 5.25% over the last twelve months and an EBITDA of $177.24 million.
Shareholders can expect the new dividend of $0.18 per share to be paid on May 17, 2025, to those on record as of May 5, 2025. In conjunction with the dividend adjustment, Easterly also announced a 1-for-2.5 reverse stock split set to take effect on April 28, 2025. After the reverse stock split, the new dividend will equate to $0.45 per share, or $1.80 per share annually.
Despite these changes, Easterly reaffirmed its earnings outlook for 2025, which will be updated after the first quarter earnings are released around April 29, 2025. This forward-looking guidance is based on management's current view of market conditions and may be subject to change. InvestingPro analysts project the company will remain profitable this year, with additional insights available in the comprehensive Pro Research Report covering this and 1,400+ other top US stocks.
Easterly's management team specializes in properties leased to U.S. Government agencies either directly or through the U.S. General Services Administration (GSA). The company's strategic focus is on Class A commercial properties that are mission-critical to government operations. The company maintains a gross profit margin of 66.58% and generates significant cash flow, with levered free cash flow of $162.63 million in the last twelve months.
This news is based on a press release statement and reflects the company's strategic adjustments in response to market conditions. Investors are advised that actual results could differ from the guidance provided.
In other recent news, Easterly Government Properties reported its fourth-quarter 2024 earnings, which fell short of expectations. The company's earnings per share (EPS) was $0.05, missing the forecasted $0.06, while revenue came in at $74.14 million, below the anticipated $77.44 million. Despite these results, Easterly Government Properties closed 10 new assets in 2024 and plans significant acquisitions in 2025, targeting core funds from operations (FFO) growth of 2-3%. Jefferies initiated coverage on Easterly Government Properties with a Buy rating, citing the company's potential to overcome recent earnings growth challenges. The firm also expressed confidence in the company's strategic focus and growth potential. Easterly Government Properties aims to invest between $100 million and $75 million in acquisitions and growth initiatives in 2025. The company continues to emphasize its commitment to partnering with the U.S. Government, focusing on mission-critical facilities.
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