Global Medical REIT Inc's Dividend Analysis
Assessing the Sustainability of Global Medical REIT Inc's Dividend Payments
Global Medical REIT Inc (NYSE:GMRE) recently announced a dividend of $0.21 per share, payable on 2024-01-09, with the ex-dividend date set for 2023-12-26. 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 Global Medical REIT Inc's dividend performance and assess its sustainability.
What Does Global Medical REIT Inc Do?
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Global Medical REIT Inc is a Maryland corporation engaged primarily in the acquisition of purpose-built healthcare facilities and the leasing of those facilities to strong healthcare systems and physician groups. Its healthcare facilities are located in secondary markets and suburbs of primary markets and are typically leased to single-tenants under triple-net leases. Its tenants are physician groups, regional or national healthcare systems or combinations thereof. The company's principal business objective is to provide attractive, risk-adjusted returns to its stockholders through a combination of reliable dividends and long-term capital appreciation.
A Glimpse at Global Medical REIT Inc's Dividend History
Global Medical REIT Inc has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Global Medical REIT Inc's Dividend Yield and Growth
As of today, Global Medical REIT Inc currently has a 12-month trailing dividend yield of 7.30% and a 12-month forward dividend yield of 7.30%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, Global Medical REIT Inc's annual dividend growth rate was 1.60%. Extended to a five-year horizon, this rate decreased to 0.90% per year. Based on Global Medical REIT Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Global Medical REIT Inc stock as of today is approximately 7.63%.
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, Global Medical REIT Inc's dividend payout ratio is 3.50, and this may suggest that the company's dividend may not be sustainable. Global Medical REIT Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Global Medical REIT Inc's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 4 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Global Medical REIT Inc'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 Global Medical REIT Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Global Medical REIT Inc's revenue has increased by approximately 0.20% per year on average, a rate that underperforms than approximately 54.59% 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, Global Medical REIT Inc's earnings increased by approximately 5.10% per year on average, a rate that underperforms than approximately 43.15% of global competitors.
Engaging Conclusion: Evaluating Dividend Reliability
In conclusion, while Global Medical REIT Inc offers a high dividend yield, the sustainability of its dividends is a subject of scrutiny. The modest dividend growth rate, payout ratio concerns, and fair profitability and growth ranks present a mixed picture for investors. Value investors considering GMRE for its dividend income should weigh these factors carefully against their investment goals and risk tolerance. Will the company's strategy of investing in healthcare facilities in secondary markets continue to support its dividend in the years to come? As we ponder this question, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to explore other income-generating 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.
