Agree Realty Corp's Dividend Analysis
Assessing the Sustainability of Agree Realty Corp's Upcoming Dividend
Agree Realty Corp (NYSE:ADC) recently announced a dividend of $0.25 per share, payable on 2024-02-14, with the ex-dividend date set for 2024-01-30. 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 Agree Realty Corp's dividend performance and assess its sustainability.
What Does Agree Realty Corp Do?
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Agree Realty Corporation operates as a fully integrated real estate investment trust mainly focused on the ownership, acquisition, development, and management of retail properties net leased to industry-leading tenants. The company is primarily in the business of acquiring, developing, and managing retail real estate. Its diverse portfolio includes properties leased to Walmart, 7-Eleven, Wawa, Gerber Collision, and other prominent retailers.
A Glimpse at Agree Realty Corp's Dividend History
Agree Realty Corp has maintained a consistent dividend payment record since 1994, with dividends currently distributed on a monthly basis. Since 2011, Agree Realty Corp has increased its dividend each year, earning it the status of a dividend achiever, a distinction reserved for companies that have raised their dividends annually for at least 13 consecutive years. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Agree Realty Corp's Dividend Yield and Growth
As of today, Agree Realty Corp currently has a 12-month trailing dividend yield of 4.91% and a 12-month forward dividend yield of 4.98%, indicating an expected increase in dividend payments over the next 12 months. Over the past three years, Agree Realty Corp's annual dividend growth rate was 7.20%, which decreased to 6.60% per year over a five-year period. Over the past decade, the annual dividends per share growth rate stands at 5.80%. Based on the yield and five-year growth rate, the 5-year yield on cost of Agree Realty Corp stock as of today is approximately 6.76%.
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 2023-09-30, Agree Realty Corp's dividend payout ratio is 1.70, which may suggest that the company's dividend may not be sustainable. Agree Realty Corp's profitability rank of 9 out of 10, as of 2023-09-30, suggests good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
For the sustainability of dividends, a company must have robust growth metrics. Agree Realty Corp's growth rank of 9 out of 10 suggests that the company's growth trajectory is strong compared to its competitors. The company's revenue model is solid, with a revenue per share and a 3-year revenue growth rate that outperforms approximately 72.88% of global competitors. Agree Realty Corp's 3-year EPS growth rate and its 5-year EBITDA growth rate also demonstrate its capability to grow earnings and EBITDA, outperforming 52.36% and 57.06% of global competitors, respectively.
Next Steps
In conclusion, while Agree Realty Corp's dividend history and growth rates present an attractive record, the high payout ratio may raise concerns about the sustainability of its dividends. However, the company's strong profitability and growth metrics provide a counterbalance, suggesting that it may continue to support and potentially increase its dividend payments. Investors should consider these factors in their decision-making process. For those seeking high-dividend yield stocks, GuruFocus Premium users can use the High Dividend Yield Screener to discover more 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.
This article first appeared on GuruFocus.
