Armada Hoffler Properties Inc (AHH) shares took a tumble on Thursday, dropping by 8.39% to $10.87. The decline followed the company’s announcement of an underwritten offering of 9 million shares, aiming to raise approximately $94.5 million. This offering is slated to close on September 27th, subject to customary closing conditions. Adding to the news, Armada Hoffler has granted underwriters a 30-day option to purchase up to 1.35 million additional shares.
The company plans to utilize the proceeds from the offering to repay loans on several properties and reduce its revolving credit facility. Any remaining funds will be directed towards general corporate purposes and working capital.
Before diving into the investment potential of AHH, it’s crucial to consider the company’s capital allocation strategy. Armada Hoffler Properties does pay a dividend, currently yielding 6.94% per year. This dividend payout might attract some investors seeking income. However, it’s essential to go beyond the dividend and examine factors like stock buyback programs, which can influence share price performance.
While AHH doesn’t have an active buyback program as of late, these programs often act as a support for share prices by increasing demand. Looking at the broader picture, AHH’s 52-week high stands at $13.11, while its 52-week low sits at $9.81. Investors should consider this price range, along with the recent share offering, before making any investment decisions.
