Keepin' It Real 

Economics, Housing, & Commercial Real Estate Analysis

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  • Alex Pettee, CFA

Dividend Boosts | Vaccine Day | Homebuilders On Sale

Summary

  • U.S. equity markets climbed to fresh record highs Tuesday as coronavirus vaccinations began in the United Kingdom and as lawmakers in the US reportedly remain committed to advancing stimulus talks.

  • Following a decline of 0.2% yesterday, the S&P 500 and Nasdaq 100 each finished higher by 0.3% today while the Dow Jones Industrial Average gained 104-points.

  • Real estate equities were laggards on the day, however, as the broad-based Equity REIT ETF (VNQ) declined by 0.4% today with 11 of the 18 property sectors in negative territory.

  • Mid-America (MAA) became the seventh apartment REIT to raise its dividend this afternoon while CubeSmart (CUBE) became the second storage REIT. Thus far, 47 equity REITs have now raised dividends in 2020 compared to 66 that have reduced or suspended payouts.

  • The high-flying homebuilders pulled back today following a mixed earnings report from high-end homebuilder Toll Brothers. TOL reported a record-68% surge in order growth but guidance called for a moderation of red-hot conditions in early 2021.

Real Estate Daily Recap

U.S. equity markets climbed to fresh record highs Tuesday as coronavirus vaccinations began in the United Kingdom and as lawmakers in the United States reportedly remain committed to advancing stimulus talks. Following a decline of 0.2% yesterday, the S&P 500 ETF (SPY) and tech-heavy Nasdaq 100 (QQQ) each gained 0.3% today while the Dow Jones Industrial Average (DIA) gained 104-points. Real estate equities were laggards on the day, however, as the broad-based Equity REIT ETF (VNQ) declined by 0.4% today with 11 of the 18 property sectors in negative territory. The Mortgage REIT ETF (REM), however, gained 1.1% on the day.

After initially shrugging off the positive vaccine news this morning, equity markets gained steam throughout the day following reports that Senate Republicans are willing to compromise on several "sticky points" to finalize a long-stalled fiscal stimulus deal. 6 of the 11 GICS equity sectors finished higher on the day led by the Energy (XLE), Healthcare (XLV), and Materials (XLB) sectors while Small-Cap (SLY) and Mid-Cap (MDY) stocks continued to outperform the large-cap indexes. The high-flying homebuilders, along with the broader Hoya Capital Housing Index pulled back today, however, following a mixed earnings report from high-end homebuilder Toll Brothers (TOL) even after the firm reported a 68% surge in order growth.

As discussed in 'Tis The Season For REIT Dividends, "dividend declaration season" has not disappointed thus far. After six equity REITs boosted their dividends last week, we saw an additional two REITs boost dividends over the last 24 hours. Mid-America (MAA) became the seventh apartment REIT to raise its dividend this afternoon while CubeSmart (CUBE) became the second storage REIT. Thus far, 47 equity REITs have now raised dividends in 2020 compared to 66 that have reduced or suspended payouts.

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Additional Disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.

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