Resource America: Staying Bullish As The Company Hikes Its Dividend Another 20%

As an investor who is driven by the notion of the companies returning more and more to their shareholders through various types of dividend-related events (such as increases and decreases of a company's annualized dividend and the announcement of special dividends) I wanted to highlight one specific company that have recently announced a 20% increase in its quarterly payout.

Resource America REXI – On Monday, September 29^th Resource America, which now possesses a forward yield of 2.56% ($0.24/share annualized), announced a 20% or $0.01/share increase from its prior payout of $0.05/share for the upcoming quarter.

Headquartered in Philadelphia, Pennsylvania, Resource America, Inc. operates as an asset management company. The company, through its subsidiaries, operates in three segments: Financial Fund Management; Real Estate; and Equipment Finance.

As a result of Monday’s closing price of $9.36/share, Resource America now has a market capitalization of $190.48 million, a P/E ratio of 24, and a forward yield of $2.56% ($0.24). Its trend behavior, although fairly flat in the near-term (given the fact shares are trading 0.46% above their 20-DSMA and 0.43% below their 50-DSMA), is actually looking a bit more attractive in the long term (considering the fact shares are trading 3.77% above their 200-DSMA). If the company can continue to return value to its shareholders through increased dividend payouts as has been the case over the last 24-months, there’s a very good chance we could see its trend behavior improve over the next year.

Strong 24-Month Dividend Growth

Over the last two years we’ve seen Resource America increase its annualized dividend from $0.12/share in 2012 to its most recent annualized dividend of $0.24/share. This behavior not only demonstrates an overall increase of $0.12/share or $0.06/share per year but also demonstrates a dividend growth rate of 100% over the last two years. If that isn't enough for you, it should be noted that the company has now paid a quarterly dividend in every single quarter since January 1996.

Conclusion

For those of you who may be considering a position in Resource America, I strongly recommend keeping a close eye on the company's dividend behavior over the next 18-24 months as it should directly impact both the company’s near-term trend behavior and the long-term value of its shares.