Analyzing Gladstone Commercial Corp's Dividend Performance and Sustainability
A deep dive into the dividend history and growth of Gladstone Commercial Corp (NASDAQ:GOOD)
Gladstone Commercial Corp(NASDAQ:GOOD) recently announced a dividend of $0.1 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-20. 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 deep dive into Gladstone Commercial Corps dividend performance and assess its sustainability.
What Does Gladstone Commercial Corp Do?
Warning! GuruFocus has detected 7 Warning Signs with GOOD. Click here to check it out.
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Gladstone Commercial Corp is a real estate investment trust, which engages in investing and owning net leased industrial, commercial, and retail real property and making long-term industrial and commercial mortgage loans. Its portfolio consists of single-tenant commercial, industrial real properties, and medical properties nationwide. Its principal investment objectives are to generate income from rental properties.
A Glimpse at Gladstone Commercial Corp's Dividend History
Gladstone Commercial Corp has maintained a consistent dividend payment record since 2003. Dividends are currently distributed on a monthly basis. Gladstone Commercial Corp has increased its dividend each year since 2003. 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 20 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Gladstone Commercial Corp's Dividend Yield and Growth
As of today, Gladstone Commercial Corp currently has a 12-month trailing dividend yield of 9.85% and a 12-month forward dividend yield of 9.08%. This suggests an expectation of decrease dividend payments over the next 12 months.
Over the past three years, Gladstone Commercial Corp's annual dividend growth rate was 0.10%. Extended to a five-year horizon, this rate stayed the same. Based on Gladstone Commercial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Gladstone Commercial Corp stock as of today is approximately 9.90%.
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, Gladstone Commercial Corp's dividend payout ratio is 0.00.
Gladstone Commercial Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Gladstone Commercial Corp's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Gladstone Commercial Corp'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 Gladstone Commercial Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Gladstone Commercial Corp's revenue has increased by approximately 0.90% per year on average, a rate that underperforms than approximately 50.32% 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, Gladstone Commercial Corp's earnings increased by approximately 20.60% per year on average, a rate that underperforms than approximately 28.6% of global competitors.
Conclusion
In conclusion, Gladstone Commercial Corp has demonstrated a consistent dividend payment record and growth rate. However, investors should monitor its payout ratio and profitability rank to assess the sustainability of these dividends. Moreover, the company's growth metrics, such as its revenue per share and 3-year EPS growth rate, provide insights into its future prospects. While the company's growth trajectory appears promising, it is crucial for investors to keep an eye on these metrics to make informed investment decisions.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
