An in-depth analysis of Alexander & Baldwin Inc's dividend history, yield, growth and sustainability
Alexander & Baldwin Inc (ALEX, Financial) recently announced a dividend of $0.22 per share, payable on 2023-10-04, with the ex-dividend date set for 2023-09-15. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Alexander & Baldwin Inc's dividend performance and assess its sustainability.
Understanding Alexander & Baldwin Inc's Business Model
Alexander & Baldwin Inc operates in the real estate sector. It functions through two segments namely Commercial Real Estate and Land Operations. The Commercial Real Estate segment owns and manages retail, industrial and office properties in Hawaii, thereby accounting for majority of the company's revenue. The Land Operations segment actively manages the company's land and real estate-related assets and makes optimum utilization of these assets. Geographically, the activities are carried out across the United States.
Tracing Alexander & Baldwin Inc's Dividend History
Alexander & Baldwin Inc has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Deciphering Alexander & Baldwin Inc's Dividend Yield and Growth
As of today, Alexander & Baldwin Inc currently has a 12-month trailing dividend yield of 5.10% and a 12-month forward dividend yield of 5.10%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, Alexander & Baldwin Inc's annual dividend growth rate was 6.40%. Based on Alexander & Baldwin Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Alexander & Baldwin Inc stock as of today is approximately 5.10%.
Is Alexander & Baldwin Inc's Dividend Sustainable?
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Alexander & Baldwin Inc's dividend payout ratio is 1.54. This may suggest that the company's dividend may not be sustainable. Alexander & Baldwin Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Alexander & Baldwin Inc's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 6 years out of past 10 years.
Future Growth Prospects of Alexander & Baldwin Inc
To ensure the sustainability of dividends, a company must have robust growth metrics. Alexander & Baldwin Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Alexander & Baldwin Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Alexander & Baldwin Inc's revenue has increased by approximately -19.30% per year on average, a rate that underperforms approximately 92.43% of global competitors.
Concluding Thoughts
While Alexander & Baldwin Inc has a consistent dividend payment history and a fair growth outlook, the sustainability of its dividends is questionable due to its high payout ratio. Investors should consider these factors while making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
