A Deep Dive into: $ABR Arbor Realty Trust

A lot of you may have seen me posting on twitter about $ABR this week. This is a dividend stock that I have in my portfolio and one that I am excited about. Why? Well because with Arbor realty trust you get the best of both worlds, capital appreciation and dividends. So, with that being said lets take a deep dive into Arbor Realty Trust!

Who are they and what do they do?

Arbor Realty Trust is a real estate investment trust, which engages in the provision of loan origination and servicing for multifamily, seniors housing, healthcare, and diverse commercial real estate assets. It operates through the structured business and agency business segments. The structured business segment offers loan origination and investment services, while the agency business segment offers agency loan origination and servicing.

The company was founded in June 2003 and is headquartered in Uniondale, NY. The company has paid dividends consecutively, every year since 2005.

Real Estate? What kind of real estate?

Arbor Realty Trust’s real estate is well diversified in asset classes, along with locations. Their portfolio consist of office, healthcare, multifamily, land, student housing, hotel, and self storage facilities. This portfolio is spread across 8+ different states within the United States.

Lets talk Money.

Arbor Realty Trust has had consistent revenue growth since the company’s conception in 2003. From, 2019 to 2020, revenue grew from $349,386,000 to $434,133,000, a 24% increase year over year. In Q1 of 2021, the company reported revenue of $79,200,00, with $35.3 million coming from the agency segment and $43.9 million coming from the structured business segment. Bottom line for us dividend investors? More revenue = More cash to payout

Did someone say dividend?

Arbor realty trust has paid dividends since 2005, that 16 CONSECUTIVE YEARS! On top of that they have grew their dividend every year since 2012, that’s 8 CONSECUTIVE YEARS!

From 2019 to 2020, the dividend grew by 7.8%, you can afford those kind of raises when your growing revenues 24% year over year. That’s not the only percentage that starts with a 7 though. $ABR is currently yielding 7.5%, with a dividend of $0.34 per share.

Now, I know what you’re thinking, with that kind of yield the long term growth must be terrible. Well, sorry to burst your bubble but over the past 5 years ABR is up 154.60%. Yes, 154.60% while paying dividends at a 7.5% yield.

Yeah, but is it sustainable?

ABR is classified as a REIT or real estate investment trust. Why is that important? REIT’s are required to payout 90% of their earnings to shareholders. ABR’s payout ratio is currently sitting at 88%, can you smell a dividend hike coming?

Also, as previously mentioned revenues for this company to continue to grow and real estate isn’t going anywhere. ABR is in the business of loan origination so the fluctuations of the asset values doesn’t necessarily have an effect on their business.

So, with rising revenue combined with the 90% rule, we could continue to see a growing dividend for a while to come.

In case you still have concerns on whether or not the dividend is sustainable lets take a look at how the payout ratio compares to other popular REITS.

Want to see more articles like this? Let me know! Reach out on twitter @Dividends_Daily.

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