Assessing the Sustainability of Prologis Inc's Dividend Payments
Prologis Inc (PLD, Financial) recently announced a dividend of $0.87 per share, payable on 2023-12-29, with the ex-dividend date set for 2023-12-15. 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 look into Prologis Inc's dividend performance and assess its sustainability.
Understanding Prologis Inc's Business Model
Prologis was formed by the June 2011 merger of AMB Property and Prologis Trust. The company develops, acquires, and operates around 1.2 billion square feet of high-quality industrial and logistics facilities across the globe. The company also has a strategic capital business segment that has around $60 billion of third-party AUM. The company is organized into four global divisions (Americas, Europe, Asia, and other Americas) and operates as a real estate investment trust.
A Look at Prologis Inc's Dividend Track Record
Prologis Inc has maintained a consistent dividend payment record since 1997. Dividends are currently distributed on a quarterly basis. Prologis Inc has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Examining Prologis Inc's Dividend Yield and Growth
As of today, Prologis Inc currently has a 12-month trailing dividend yield of 2.63% and a 12-month forward dividend yield of 2.68%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Prologis Inc's annual dividend growth rate was 14.20%. Extended to a five-year horizon, this rate decreased to 11.60% per year. And over the past decade, Prologis Inc's annual dividends per share growth rate stands at an impressive 10.40%. Based on Prologis Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Prologis Inc stock as of today is approximately 4.55%.
Assessing the Dividend Sustainability
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 2023-09-30, Prologis Inc's dividend payout ratio is 1.08, which may suggest that the company's dividend may not be sustainable.
Prologis Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Prologis Inc's profitability 8 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Prologis Inc's Growth Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. Prologis Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Prologis Inc's revenue has increased by approximately 13.10% per year on average, a rate that outperforms approximately 86.77% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Prologis Inc's earnings increased by approximately 26.00% per year on average, outperforming approximately 81.32% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 16.30%, outperforms approximately 83.38% of global competitors.
Conclusion: The Verdict on Prologis Inc's Dividend Future
In conclusion, Prologis Inc demonstrates a strong dividend history with consistent growth, a reasonable yield, and evidence of a commitment to returning value to shareholders. However, the current payout ratio raises questions about long-term sustainability, which may necessitate closer scrutiny by investors. Meanwhile, the company's robust profitability and growth metrics paint a positive picture for future dividend prospects. Investors should weigh these factors and consider the company's overall financial health and market position when making investment decisions. For those seeking additional dividend opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener to find stocks that align with their investment criteria.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
Also check out: (Free Trial)
