A Comprehensive Analysis of ARE's Dividend History, Yield, Growth, and Future Prospects
Recently, Alexandria Real Estate Equities Inc (ARE, Financial) announced a dividend of $1.24 per share, scheduled for payment on October 13, 2023. With the ex-dividend date set for September 28, 2023, investors are keenly observing the company's dividend history, yield, and growth rates. Using data from GuruFocus, this article provides an in-depth analysis of Alexandria Real Estate Equities Inc's dividend performance and assesses its sustainability.
About Alexandria Real Estate Equities Inc
Alexandria Real Estate Equities Inc is an urban office real estate investment trust (REIT) that leases space to life science, agtech, and technology tenants. With significant market presence in key locations like Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle, Alexandria provides dynamic and collaborative environments for its tenants. Through its venture capital platform, it also offers strategic capital to transformative life science, agtech, and technology companies.
Exploring Alexandria Real Estate Equities Inc's Dividend History
Since 1997, Alexandria Real Estate Equities Inc has consistently paid dividends, distributed on a quarterly basis. Notably, the company has increased its dividend each year since 2010, earning it the status of a dividend achiever. This distinction is given to companies that have consistently increased their dividend each year for at least the past 13 years.
Understanding Alexandria Real Estate Equities Inc's Dividend Yield and Growth
Currently, Alexandria Real Estate Equities Inc boasts a 12-month trailing dividend yield of 4.94% and a 12-month forward dividend yield of 5.08%, indicating an anticipated increase in dividend payments over the next 12 months. In comparison to 26.54% of global competitors in the REITs industry, Alexandria's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, the company's annual dividend growth rate was 5.70%, which increased to 6.40% per year over a five-year horizon. Over the past decade, the annual dividends per share growth rate stands at 7.60%. This growth trajectory results in a 5-year yield on cost of approximately 6.74% for Alexandria Real Estate Equities Inc stock as of today.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The dividend payout ratio of Alexandria Real Estate Equities Inc is 1.43 as of June 30, 2023, which may suggest that the company's dividend may not be sustainable. However, the company's profitability rank of 8 out of 10 indicates good profitability prospects. The company has reported net profit in 9 out of the past 10 years, suggesting a robust earnings record.
Future Prospects: Growth Metrics
For dividend sustainability, a company must exhibit strong growth metrics. Alexandria Real Estate Equities Inc's growth rank of 8 out of 10 suggests a promising growth trajectory. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, outperforming approximately 71.38% of global competitors. Furthermore, the company's 3-year EPS growth rate and 5-year EBITDA growth rate of 13.40% outperform approximately 73.01% of global competitors, indicating a strong potential for future growth.
Concluding Thoughts
While Alexandria Real Estate Equities Inc's dividend payout ratio suggests potential sustainability concerns, its consistent dividend history, attractive yield, and robust growth metrics indicate a promising future. The company's strong profitability and revenue growth, coupled with its impressive EPS and EBITDA growth rates, further reinforce its potential for sustained dividends. However, investors should continue to monitor these factors over time to ensure the company maintains its dividend performance.
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