Westpac Banking Corp recently disclosed that it has reduced its position in American Homes 4 Rent by 6.2%, according to the company’s most recent filing with the Securities and Exchange Commission. The sale of 20,699 shares during the fourth quarter brought Westpac’s total holdings to 314,255 shares worth $9,472,000 as of the end of the reporting period. This move comes as American Homes 4 Rent announces a boost in its quarterly dividend from $0.18 to $0.22 per share, representing a $0.88 annualized dividend and a yield of 2.67%. The announcement also reveals that Director Douglas N. Benham acquired over 1,000 shares on two separate occasions earlier this year. Mr. Benham is now directly responsible for roughly 25,000 shares valued at over $600,000.
This news raises several important questions about the state of American Homes 4 Rent and the trajectory of real estate investment trusts (REITs) in general as we look to mid-2023 and beyond.
Firstly, why did Westpac choose to reduce its holdings in AH4R? What factors were involved in this decision? Were there financial concerns or simply a desire to diversify their portfolio?
Secondly, what does AH4R’s higher dividend mean for shareholders? Does it signal greater trust in the stability and growth potential of REITs as an asset class? How will investors react?
Thirdly, are we seeing a trend towards increased insider buying of REITs like AH4R, or is Benham’s purchase merely coincidental?
Only time will tell how these developments play out within the broader economic context but they undoubtedly bear watching for those interested in real estate investment and development strategies moving forward.
As always with such investments however – caveat emptor!
American Homes 4 Rent Attracts Attention of Large Investors and Brokers
American Homes 4 Rent (AMH), a real estate investment trust, has recently caught the attention of several large investors who have increased or decreased their stakes in the company. MetLife Investment Management LLC acquired a new stake worth $236,000 in the first quarter of this year, whereas other institutional investors such as Great West Life Assurance Co. Can and Yousif Capital Management LLC grew their holdings by 5.6% and 5.1% respectively during the same quarter.
Dimensional Fund Advisors LP and Sei Investments Co. also contributed to AMH’s total ownership percentage – according to official reports, institutional investors now own an overwhelming 84.29% of AMH’s stock.
Brokerages have been closely following AMH’s performance and expressing their thoughts through target price reductions or raises and ratings adjustment from ‘buy’ to ‘hold’ and then back to ‘outperform’. The latest rating report shows that one research analyst has rated the stock with a sell rating, while eight have issued a hold rating, and nine have issued a buy rating to the stock.
Despite these varying opinions on AMH’s prospectus for future growth, it is noteworthy that having opened at $32.95 last Friday, stocks closed trading at $41.33 ten days later – its highest for 12 months – marking considerable progress given its previous twelve-month low of $28.78.
For those unfamiliar with American Homes 4 Rent as an organization, they are predominantly focused on providing residential properties for lease across the US market; boasting over 53 thousand homes for renting purposes in over four dozen markets spread across twenty-two states within America.
It should be noted that a fundamental factor driving demand for leasing accommodation comes from demographic changes taking place in America where an increasing number of millennials opt-in to rent instead of settling down with mortgage payments typical among older generations.
As such from both an economic standpoint and sociocultural perspective, the organization’s strategic direction towards residential property leasing represents a strong opportunity for sustained growth going forward.