Bluerock Homes Trust (BHM) Announces First Quarter Dividends on Series A Preferred Stock

Rhea-AI Summary

Bluerock Homes Trust, Inc. (BHM) has announced the authorization of monthly cash dividends on the Series A Redeemable Preferred Stock for the first quarter of 2024, amounting to $0.375 per share. The dividends will be paid in three installments to stockholders of record on specific dates. Additionally, special dividends have been declared, which will be combined with the regular monthly dividends to achieve a 2.0% annual dividend rate over the 10-Year Treasury Rate with a floor of 6.0% annually, payable monthly.

Insights

Financial Analyst

The declaration of monthly cash dividends and special dividends for Bluerock Homes Trust's Series A Preferred Stock may signal a robust capital allocation strategy, aiming to reward investors with consistent income. The preferred dividends, set at a rate of $0.375 per share quarterly, align with the traditional use of preferred stock to provide a fixed income stream.

Moreover, the special dividend structure tied to the 10-Year Treasury Rate with a floor of 6.0% annually indicates a potentially attractive yield, especially in a rising interest rate environment where the average 10-Year Treasury Rate exceeds 4.0%. This could appeal to income-focused investors, especially if the rate is competitive compared to the broader market's dividend yield.

However, the impact on the company's liquidity and debt servicing capacity must be scrutinized. Dividend policies can affect a company's financial flexibility and it's crucial to assess whether these payouts are sustainable in the long-term without compromising growth or operational needs.

Market Research Analyst

The announcement by Bluerock Homes Trust reflects a broader industry trend where real estate investment trusts (REITs) seek to attract investors through regular income via dividends. Given the current economic climate, with potential headwinds from interest rate hikes and inflation, the ability of REITs to maintain or increase dividends can be a key differentiator in investor decisions.

Analysing the company's past dividend payout ratio and comparing it with industry peers can provide insights into the sustainability of these dividends. If the payout ratio is significantly higher than its peers, it could indicate an aggressive distribution policy that may not be sustainable in the long run.

Furthermore, the prorated dividend for newly-issued shares suggests an incentive for new investors to participate in the preferred stock offering. This could potentially expand the investor base and improve the stock's liquidity.

Legal Expert

From a legal perspective, the adherence to the Articles Supplementary to the company's charter is crucial in ensuring that the dividend payments are compliant with corporate governance standards. The prorated dividend payment for newly-issued shares indicates that the company is following a transparent and equitable approach in its distribution policy, which is essential for investor trust.

Additionally, the structure of the special dividends, which are contingent on the average 10-Year Treasury Rate, must be clearly outlined in the dividend policy to avoid potential disputes with shareholders. It is important that the terms of such special dividends are well-documented and communicated to ensure clarity and legal compliance.

NEW YORK, Jan. 16, 2024 /PRNewswire/ -- Bluerock Homes Trust, Inc. (NYSE American: BHM) (the "Company") today announced that its Board of Directors has authorized and the Company has declared monthly cash dividends on the Company's Series A Redeemable Preferred Stock (the "Series A Preferred Stock") for the first quarter of 2024, equal to a quarterly rate of $0.375 per share (the "Series A Preferred Dividends").

The Series A Preferred Dividends will be payable in cash as follows: accrued but unpaid dividends of $0.125 per share to be paid on Monday, February 5, 2024 to Series A Preferred stockholders of record as of Thursday, January 25, 2024; $0.125 per share to be paid on Tuesday, March 5, 2024 to Series A Preferred stockholders of record as of Friday, February 23, 2024; and $0.125 per share to be paid on Friday, April 5, 2024 to Series A Preferred stockholders of record as of Monday, March 25, 2024. Newly-issued shares of Series A Preferred Stock held for only a portion of each applicable monthly dividend period will receive a prorated Series A Preferred Dividend based on the actual number of days in the applicable dividend period during which each such share of Series A Preferred Stock was outstanding, as permitted under the Articles Supplementary to the Company's charter dated March 14, 2023.

The Board of Directors has previously authorized, and in connection with the Series A Preferred Dividends the Company has also declared, special dividends on the Series A Preferred Stock for the first quarter of 2024 (the "Series A Preferred Special Dividends"), which will be seamlessly aggregated with the regular monthly Series A Preferred Dividends so as to effect a dividend rate of 2.0% over the 10-Year Daily Treasury Par Yield Curve Rate ("10-Year Treasury Rate") with a floor of 6.0% annually, calculated and paid monthly. The Series A Preferred Special Dividends will be payable to the extent the average 10-Year Treasury Rate exceeds 4.0%.

About Bluerock Homes Trust, Inc.
Bluerock Homes Trust, Inc. (NYSE American: BHM), headquartered in New York, New York, is an externally managed REIT that owns and operates high-quality single-family properties located in attractive markets with a focus on the knowledge-economy and high quality of life regions of the Sunbelt and high growth areas of the Western United States. BHM's principal objective is to generate attractive risk-adjusted investment returns by assembling a portfolio of pre-existing single-family rental homes and developing build-to-rent communities. BHM properties are located across a diverse group of growth markets and will seek to target a growing pool of middle-market renters seeking the single-family lifestyle without the upfront and ongoing investments associated with home ownership. For more information, please visit bluerockhomes.com.

Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company's present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company's Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission ("SEC") on March 22, 2023, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

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SOURCE Bluerock Homes Trust, Inc.

FAQ

What dividends has Bluerock Homes Trust, Inc. (BHM) authorized for the first quarter of 2024?

The Company has authorized monthly cash dividends on its Series A Redeemable Preferred Stock, amounting to $0.375 per share.

When will the dividends be paid?

The dividends will be paid on specific dates: February 5, 2024, March 5, 2024, and April 5, 2024.

How are the special dividends calculated?

The special dividends will be combined with the regular monthly dividends to achieve a 2.0% annual dividend rate over the 10-Year Treasury Rate with a floor of 6.0% annually, payable monthly.