Assessing the Upcoming Dividend and Financial Health of Vicinity Centres (CNRAF, Financial)
Vicinity Centres(CNRAF) recently announced a dividend of $0.06 per share, payable on 2024-03-07, with the ex-dividend date set for 2024-02-20. 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 Vicinity Centres's dividend performance and assess its sustainability.
What Does Vicinity Centres Do?
Vicinity Centres was created after the merger of Federation Centres and Novion in June 2015, creating one of Australia's largest retail REITs. Its directly and indirectly owned assets have a book value of about AUD 14 billion. The assets are skewed to large, high-end shopping centers, with about half in major regional malls, a fifth in subregional, 15% in CBD locations, 13% in outlet centers, and 1% in neighborhood malls.
A Glimpse at Vicinity Centres's Dividend History
Vicinity Centres has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Vicinity Centres's Dividend Yield and Growth
As of today, Vicinity Centres currently has a 12-month trailing dividend yield of 6.25% and a 12-month forward dividend yield of 5.99%. This suggests an expectation of decreased dividend payments over the next 12 months. Over the past three years, Vicinity Centres's annual dividend growth rate was 14.30%. Extended to a five-year horizon, this rate decreased to -13.70% per year. And over the past decade, Vicinity Centres's annual dividends per share growth rate stands at -7.90%.
Based on Vicinity Centres's dividend yield and five-year growth rate, the 5-year yield on cost of Vicinity Centres stock as of today is approximately 2.99%.
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, Vicinity Centres's dividend payout ratio is 1.93, which may suggest that the company's dividend may not be sustainable.
Vicinity Centres's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Vicinity Centres's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Vicinity Centres'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 Vicinity Centres's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Vicinity Centres's revenue has increased by approximately -4.30% per year on average, a rate that underperforms approximately 73.72% of global competitors.
Next Steps for Investors
Considering Vicinity Centres's consistent dividend payments, its recent dividend growth trends, and the current payout ratio, investors should weigh the dividend sustainability alongside the company's profitability and growth metrics. While there are positive indicators in terms of profitability and growth ranks, the negative revenue growth rate and the potential for decreased dividends signal that investors should approach with caution and monitor the company's financial health closely. For those seeking high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener to find potential investment opportunities.
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.
