Analyzing the Dividend History, Yield, Growth, and Sustainability of Elme Communities (NYSE:ELME)
Elme Communities(NYSE:ELME) recently announced a dividend of $0.18 per share, payable on 2023-10-04, with the ex-dividend date set for 2023-09-19. 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 Elme Communities's dividend performance and assess its sustainability.
Understanding Elme Communities
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Elme Communities is a real estate investment trust engaged in owning and operating properties in the greater Washington DC metropolitan area. The company's real estate portfolio is comprised of office, retail, and multifamily properties located primarily near major transportation nodes. Washington REIT derives nearly all of its income in the form of rental revenue from tenants organized into long-term leases. The company's office assets contribute the majority of this income, while the rest is split fairly evenly between its retail and multifamily locations. Washington REIT's largest tenants are banking, consulting, law, and financial services firms.
Elme Communities's Dividend History
Elme Communities has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Elme Communities's Dividend Yield and Growth
As of today, Elme Communities currently has a 12-month trailing dividend yield of 4.72% and a 12-month forward dividend yield of 4.86%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Elme Communities's annual dividend growth rate was -17.20%. Extended to a five-year horizon, this rate increased to -9.70% per year. And over the past decade, Elme Communities's annual dividends per share growth rate stands at -4.30%. Based on Elme Communities's dividend yield and five-year growth rate, the 5-year yield on cost of Elme Communities stock as of today is approximately 2.84%.
Assessing Dividend Sustainability
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, Elme Communities's dividend payout ratio is 0.00. Elme Communities's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Elme Communities's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 8 years out of past 10 years.
Elme Communities's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Elme Communities's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Elme Communities's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Elme Communities's revenue has increased by approximately 2.90% per year on average, a rate that outperforms than approximately 59.62% 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, Elme Communities's earnings increased by approximately -93.10% per year on average, a rate that outperforms than approximately 0.81999999999999% of global competitors.
Elme Communities has consistently distributed dividends since 1985, making it a potentially attractive option for income-oriented investors. However, the company's dividend growth rate has been negative over the past three, five, and ten years. Despite this, the company's strong revenue growth and profitability rank suggest that it has the potential to sustain its dividend payments in the future. Investors should continue to monitor Elme Communities's dividend performance and growth metrics to make informed investment decisions.
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This article first appeared on GuruFocus.