MGM Growth Properties Ramps Up Quarterly Dividend By 1.5%; Shares Gain

Shares of MGM Growth Properties rose 2.6% after the real estate investment trust company announced an increase in its quarterly cash dividend by 1.5% to $0.495 per share. This marks the company’s twelfth dividend increase since its initial public offering in April 2016.

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MGM Growth Properties (MGP) indicated that the new dividend will be paid on April 15 to shareholders of record as of March 31.

The company’s annual dividend of $1.98 per share now reflects a dividend yield of 5.79%.

Additionally, the company declared the closure of its underwritten follow-on public offering of 21.85 million Class A shares. This included 2.85 million shares sold, following the full exercise of the over-allotment option by the underwriters, at a public offering price of $32.15 per share. MGM Growth Properties received $676.1 million as proceeds from the offering, net of the underwriters’ discount. (See MGM Growth Properties stock analysis on TipRanks)

On March 15, KeyBanc analyst Todd Thomas initiated coverage of the stock with a Buy rating and a price target of $39 (14% upside potential).

Thomas said, “The stock trades at a discounted valuation vs. peers and presents an outsized opportunity for incremental investor demand, as it seems likely that MGM Resorts (MGM) will reduce its ownership stake in MGM Growth in the future.”

MGM Growth Properties shares have rallied 113.6% over the past year, while the stock still scores a Strong Buy consensus rating based on 7 Buys versus 2 Holds. That’s alongside an average analyst price target of $37.33, which implies 9.3% upside potential to current levels.

What’s more, MGM Growth Properties scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.