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Published Tue, 22 Dec 2020 08:44:20 -0500 on Seeking Alpha
Seeking AlphaREITsArmada Hoffler Properties: Safe 4.1% Yield With High Insider OwnershipDec. 22, 2020 8:44 AM ET|| About: Armada Hoffler Properties, Inc. (AHH)by: Gen AlphaGen Alpha Long Only, Value, Growth, Growth At Reasonable PriceSummaryAHH has seen an improvement in its rent collection and occupancy metrics since the depths of the pandemic.
Management is pivoting the portfolio towards multifamily, and is unlocking the development potential of its land.
The dividend is safe with a low payout ratio, and management has purchased more shares this year.
There is a certain value to REITs having a singular focus on one asset class, and that is why most REITs fit into this category. In fact, I recently wrote an article about one such REIT that has transitioned from a diversified healthcare/multifamily model to a pure-play on multifamily. This pure-play model allows management to focus its skills and competency on one field of expertise, and results in a simpler business model.
However, a diversified model does come with advantages. If done right, this model gives management the flexibility to make adjustments and pivot towards sectors that provide favorable risk/reward ratios. Armada Hoffler Properties (AHH) is one such REIT, and it appears that my bullish take on the company back in early October has played out, with the shares returning 12% since then, outpacing the 9% return of the S&P 500 over the same timeframe. In this article, I evaluate what makes AHH a buy at present, so let’s get started.
(Source: Company website)
A Look Into Armada Hoffler
Armada Hoffler Properties is a diversified REIT that owns Class A office, mixed-mixed use retail/grocery-anchored and Class A multi-family properties. It’s internally-managed and has been in existence since 1979. As of November 2020, AHH owns 3.7M of retail RSF (rentable square footage), 1.6M of office RSF, 2,344 multifamily units, and 1,183 student housing beds. In addition, AHH also... Read more