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Easterly Government Properties , Inc. (NYSE:DEA), a real estate investment trust, has enacted a reverse stock split of its common stock, effective today. The Maryland-based company, which specializes in acquiring, developing, and managing U.S. government-leased properties, filed the necessary amendments with the State Department of Assessments and Taxation of Maryland to consolidate its shares at a ratio of 1-for-2.5. The company, currently valued at approximately $983 million in market capitalization, maintains a solid 66.6% gross profit margin and generates annual revenue of $308 million.
The reverse stock split, which became effective at 12:01 a.m. Eastern time on Monday, reduces the number of shares available and is intended to increase the per-share trading price of the company’s stock. Following the consolidation, the par value of the issued and outstanding shares of common stock was adjusted from $0.025 back to $0.01 per share, effective at 12:02 a.m. Eastern Time on Monday. According to InvestingPro data, the stock has experienced significant pressure, declining over 38% in the past six months, with more insights available through InvestingPro’s comprehensive analysis tools.
This strategic move by Easterly Government Properties aims to make its stock more attractive to institutional investors and to comply with the New York Stock Exchange’s continued listing standards. Shareholders will see their holdings decrease in number but increase in value per share, without any change in the total value of their investment. The company currently offers a 3.5% dividend yield and maintains a beta of 0.84, indicating lower volatility compared to the broader market.
The company has filed the amendments as exhibits to its Current Report on Form 8-K with the Securities and Exchange Commission. These amendments are available for review in the exhibits section of the filing, providing shareholders and potential investors with full transparency regarding the changes.
This corporate action reflects Easterly Government Properties’ ongoing efforts to optimize its stock performance and shareholder value. The information regarding the reverse stock split is based on a press release statement.
In other recent news, Easterly Government Properties reported its fourth-quarter 2024 earnings, revealing a net income per share of $0.05, which fell short of the forecasted $0.06. The company’s revenue also missed expectations, coming in at $74.14 million compared to the anticipated $77.44 million. Despite these earnings misses, Jefferies initiated coverage of Easterly with a Buy rating and a price target of $13.00, highlighting potential growth not fully appreciated at current market valuations. In contrast, Compass Point downgraded the company from Buy to Neutral, citing a dividend cut and a reverse stock split as reasons for the reduced price target of $9.50. Easterly announced a dividend reduction of approximately 32%, adjusting the quarterly payout to $0.18 per share. The company also executed a 1-for-2.5 reverse stock split, reducing outstanding shares and adjusting the dividend to $0.45 per share post-split. These strategic moves are part of Easterly’s efforts to align with industry best practices and generate capital for growth opportunities.
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