Owners of AvalonBay Communities (NYSE: AVB) shares as of market close today will be eligible for a dividend of per share. At a price of $127.16 as of 9:35 a.m. ET, the dividend yield is 3.4%. The average volume for AvalonBay Communities has been 1.0 million shares per day over the past 30 days. AvalonBay Communities has a market cap of $14.5 billion and is part of the real estate industry. Shares are down 7.5% year to date as of the close of trading on Friday. EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys dividend stocks that have the potential for a 3% to 4% yield and 10% growth. Get his best picks for less than $50/year. AvalonBay Communities, Inc. engages in the development, redevelopment, acquisition, ownership, and operation of multifamily communities in the United States. The company has a P/E ratio of 46.86. Currently there are 6 analysts that rate AvalonBay Communities a buy, 1 analyst rates it a sell, and 8 rate it a hold. TheStreet Ratings rates AvalonBay Communities as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. You can view the full AvalonBay Communities Ratings Report now.
More About Dividends: One benefit of owning a stock is the potential that you will be paid a dividend. The distribution of dividend payments is another way for a company to share its profit with you. A dividend means that the company pays you a certain amount of money, either as a one-time payment or more commonly on a quarterly basis, for each share of stock you own. Many times, dividends come at the expense of greater price appreciation, because the company is distributing its profits to shareholders rather than reinvesting the profits back into the growth of the company. However, companies that pay dividends can be very attractive to investors when they offer a steady stream of income. There are some important terms and dates an investor should be familiar with before purchasing any dividend-paying companies. Let's work through an example to help better explain some of these terms: On March 1, ABC Widget Company has decided that because it holds excess cash and lacks investment opportunities, it would like to reward shareholders with a regular quarterly dividend payment. The date for this particular announcement is known as the declaration date. It is on this date that the company announces the specific dividend payment along with the holder of record date (aka record date) and the payment date. The company announces that a dividend payment of 25 cents per share will be payable March 31, 2012 (the payment date) to all shareholders of record at the close of business on March 16, 2012 (holder of record date). What does this all mean? Well the short story is that the company looks at its records on March 16 and anyone listed on the books as an owner of ABC Widget company will be eligible for the dividend payment (on March 31). The one other important term to remember is the ex-dividend date. The ex-dividend date (typically two trading days before the holder of record date for U.S. securities) is the day in which a company begins trading without the dividend. In order to have a claim on a dividend, shares must be purchased no later than the last business day before the ex-dividend date. A company trading ex-dividend will have the upcoming dividend subtracted from the share price at the start of the trading day. Many times, the price of a stock will increase in anticipation of the upcoming dividend as the ex-dividend date approaches, yet will fall back by the amount of the dividend on the ex-dividend date.
Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.