Assessing the Sustainability and Growth of CapitaLand Ascendas REIT's Dividends
CapitaLand Ascendas REIT (ACDSF, Financial) recently announced a dividend of $0.07 per share, payable on 2024-03-06, with the ex-dividend date set for 2024-02-08. 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 CapitaLand Ascendas REIT's dividend performance and assess its sustainability.
What Does CapitaLand Ascendas REIT Do?
CapitaLand Ascendas REIT is a real estate investment trust focusing on the industrial and business space. As of Dec. 31, 2023, it held a SGD 16.9-billion portfolio of 227 properties across Singapore, Australia, Europe, and the U.S. The property types encompass business and science parks, high-specification industrial properties, data centers, light industrial properties, and logistics and distribution centers. The trust is externally managed by Ascendas Funds Management, a subsidiary of CapitaLand Investment, which owns an 18% stake in the trust.
A Glimpse at CapitaLand Ascendas REIT's Dividend History
CapitaLand Ascendas REIT has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down CapitaLand Ascendas REIT's Dividend Yield and Growth
As of today, CapitaLand Ascendas REIT currently has a 12-month trailing dividend yield of 2.79% and a 12-month forward dividend yield of 3.28%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, CapitaLand Ascendas REIT's annual dividend growth rate was 0.20%. Extended to a five-year horizon, this rate decreased to -2.20% per year. Based on CapitaLand Ascendas REIT's dividend yield and five-year growth rate, the 5-year yield on cost of CapitaLand Ascendas REIT stock as of today is approximately 2.50%.
The Sustainability Question: Payout Ratio and Profitability
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, CapitaLand Ascendas REIT's dividend payout ratio is 1.29, which may suggest that the company's dividend may not be sustainable.
CapitaLand Ascendas REIT's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks CapitaLand Ascendas REIT's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. CapitaLand Ascendas REIT's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and CapitaLand Ascendas REIT's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. CapitaLand Ascendas REIT's revenue has increased by approximately 4.00% per year on average, a rate that outperforms approximately 63.75% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 1.70%, which outperforms approximately 51.26% of global competitors, indicates a solid foundation for continued financial health and dividend sustainability.
Final Considerations on CapitaLand Ascendas REIT's Dividend Profile
In conclusion, CapitaLand Ascendas REIT's recent dividend announcement is a reflection of its consistent dividend history and investor confidence. While the modest growth rates in dividend and a payout ratio that may raise sustainability concerns, the REIT's strong profitability and robust growth metrics provide a counterbalance. Prospective and current investors should weigh these factors when considering the trust's dividends as part of their investment strategy. With a forward-looking approach, it's also essential to monitor the industry trends and the REIT's strategic initiatives that may influence future dividend policies. Will CapitaLand Ascendas REIT continue to provide a stable income stream for its shareholders? Only time will tell, but the current indicators provide a cautiously optimistic outlook.
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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.
