Hannon Armstrong (NYSE:HASI) was one of best REIT picks in the first quarter. Since my first article (on February 13th) shares have climbed over 20% to a recent closing price of $18.59 per share.
As part of my initial research on HASI I became fixated on the unique composition of the portfolio – mostly clean energy projects with a strong investment grade composition (over 97%). Mr. Market was clearly attracted to the same powerful bond-like alternative.
Unfortunately, I was not able to take advantage of my initial research and since my article, HASI’s dividend yield has declined from 6.6% to 5.5%.
Two Year Anniversary (Since IPO)
HASI is a Maryland-based REIT that listed shares almost two years ago (on April 2013) and since the IPO the energy investment firm has closed over $1.1 billion of transactions. In 2014 HASI targeted closing $800 million of new business and instead closed $875 million, a 9% increase.
Consequently, the company was able to reach its $1 billion balance sheet goal and continued to increase leverage (as planned).
At the 2013 IPO, HASI had approximately $200 million of assets on the balance sheet and since the IPO the company has closed $1.5 billion of new business and built the balance sheet to $1 billion comprised of over 80 assets.
The company’s 2015 pipeline remains at more than $2 billion representing over 125 investment opportunities, which are continually optimized for risk-adjusted yields. On a recent earnings call, HASI’s CEO Jeffrey Eckel remarked,
If we simply maintain our market share in the markets we are already in, we estimate our pipeline will consist of more than $4 billion of investable assets in over 300 transactions in 2016 and 2017. We believe an important aspect to our sustainable dividend is the large number of well-diversified assets that make up our balance sheet and a viable pipeline of new opportunities with attractive margins that will fuel our growth over the next several years.
