High Yielding Office REIT Sees Increased Buying Interest from Insiders

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  • Franklin Street Properties Corp (NYSEAMERICAN: FSP) is a Wakefield, Massachusetts-based REIT that is focused on infill and central business district (CBD) office properties. The company pays current annual dividend yield of 8.51% and is trading near its 2020 low. As the price is testing the lows, the company has seen the highest amount of insider buying than at any time in the previous four years.

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  • In the company’s most recent earnings report they missed analyst estimates for funds from operations (FFO). They reported FFO of $0.19 per share against estimates of $0.20 and $0.22 they earned a year ago. Given the climate that we’re in, it’s not necessarily the worst report.

    Because the company is a real estate investment trust (REIT) the FFO is used to distribute dividends. The company currently pays annual yield of 8.51%. The company hasn’t raised its dividend in the past five years and has kept it steady at the current rate since May 2018. They have a current FFO payout ratio of 47%.

    So far in September, the company has seen the highest amount of insider buying in the past three years. The 226,000 shares bought in three different transactions by two different insiders is considerably more than any purchases since September 2017.

    Action to Take: With the price trading near the 2020 low from March and the high dividend yield and low payout ratio, the company is a long opportunity at this price for dividend investors.

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