Elme Communities's Dividend Analysis
Understanding Elme Communities's Upcoming Dividend and Its Sustainability
Elme Communities (NYSE:ELME) recently announced a dividend of $0.18 per share, payable on 2024-04-03, with the ex-dividend date set for 2024-03-19. 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 look into Elme Communities's dividend performance and assess its sustainability.
What Does Elme Communities Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
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.
A Glimpse at 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.
Breaking Down Elme Communities's Dividend Yield and Growth
As of today, Elme Communities currently has a 12-month trailing dividend yield of 5.39% and a 12-month forward dividend yield of 5.39%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Elme Communities's annual dividend growth rate was -15.70%. Extended to a five-year horizon, this rate increased to -12.10% per year. And over the past decade, Elme Communities's annual dividends per share growth rate stands at -4.90%.
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 2.83%.
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 2023-12-31, 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 5 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported net profit in 7 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. Elme Communities's growth rank of 5 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 6.70% per year on average, a rate that outperforms approximately 65.81% 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 42.20% per year on average, a rate that outperforms approximately 84.4% of global competitors.
Next Steps
In conclusion, while Elme Communities's historical dividend growth rates have been negative, the current yield offers investors a substantial income stream. The payout ratio of 0.00 suggests that the dividend is not currently supported by earnings, which could raise concerns about its sustainability. However, Elme Communities's fair profitability and growth outlook, alongside robust revenue and earnings growth rates, may provide some reassurance. As value investors consider the future prospects of Elme Communities's dividends, they must weigh these factors to determine if the stock aligns with their investment strategy. Will Elme Communities manage to maintain its dividend in light of its recent performance, or will investors need to look elsewhere for reliable income?
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
