An Analysis of the Company's Dividend History, Yield, Growth, and Future Prospects
Regency Centers Corp(REG, Financial) recently announced a dividend of $0.65 per share, payable on 2023-10-04, with the ex-dividend date set for 2023-09-13. 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 Regency Centers Corps dividend performance and assess its sustainability.
About Regency Centers Corp
Regency Centers is the largest shopping center-focused retail REIT. The company's portfolio includes an interest in 404 properties, which includes nearly 55 million square feet of retail space. The portfolio is geographically diversified with 22 regional offices and no single market representing more than 14% of total company net operating income. Regency's retail portfolio is primarily composed of grocery-anchored centers, with 80% of properties featuring a grocery anchor and grocery stores representing 20% of annual base rent.
Regency Centers Corp's Dividend History
Regency Centers Corp has maintained a consistent dividend payment record since 1994. Dividends are currently distributed on a quarterly basis. Regency Centers Corp has increased its dividend each year since 2010. 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 13 years.
Understanding Regency Centers Corp's Dividend Yield and Growth
As of today, Regency Centers Corp currently has a 12-month trailing dividend yield of 4.03% and a 12-month forward dividend yield of 4.07%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Regency Centers Corp's annual dividend growth rate was 2.60%. Extended to a five-year horizon, this rate increased to 3.50% per year. And over the past decade, Regency Centers Corp's annual dividends per share growth rate stands at 3.50%.
Based on Regency Centers Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Regency Centers Corp stock as of today is approximately 4.79%.
Assessing Dividend Sustainability: 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, Regency Centers Corp's dividend payout ratio is 1.20. And this may suggest that the company's dividend may not be sustainable.
Regency Centers Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Regency Centers Corp's profitability 8 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.
Looking into the Future: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Regency Centers Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Regency Centers Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Regency Centers Corp's revenue has increased by approximately 1.80% per year on average, a rate that outperforms than approximately 53.87% 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, Regency Centers Corp's earnings increased by approximately 25.30% per year on average, a rate that outperforms than approximately 76.08% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 17.10%, which outperforms than approximately 77.24% of global competitors.
Conclusion
In conclusion, while Regency Centers Corp's dividend payout ratio may raise some concerns about the sustainability of its dividend, the company's strong growth metrics, profitability rank, and consistent dividend growth rate paint a positive picture for the future. The company's ability to grow its earnings and revenue, along with its impressive EBITDA growth rate, suggest that it could continue to provide a stable dividend for its shareholders. However, investors should keep a close eye on the company's payout ratio and other financial health indicators to ensure the sustainability of its dividend.
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