Invitation Homes Inc's Dividend Analysis
Understanding INVH's Dividend Prospects and Sustainability
Invitation Homes Inc (NYSE:INVH) recently announced a dividend of $0.28 per share, payable on 2024-01-19, 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 delve into Invitation Homes Inc's dividend performance and evaluate its sustainability.
What Does Invitation Homes Inc Do?
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Invitation Homes owns a portfolio of nearly 83,000 single-family rental homes. The company focuses on owning homes in the starter and move-up segments of the housing market with an average sale price around $300,000 and generally less than 1,800 square feet. The portfolio is spread across 16 target markets that feature high employment and household formation growth with over 70% of the portfolio in the Western U.S. and Florida; 15 of the 16 markets featuring average rents lower than homeownership costs.
A Glimpse at Invitation Homes Inc's Dividend History
Invitation Homes Inc has maintained a consistent dividend payment record since 2017. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Invitation Homes Inc's Dividend Yield and Growth
As of today, Invitation Homes Inc currently has a 12-month trailing dividend yield of 3.04% and a 12-month forward dividend yield of 3.27%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Invitation Homes Inc's annual dividend growth rate was 19.20%. Extended to a five-year horizon, this rate increased to 27.10% per year. Based on Invitation Homes Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Invitation Homes Inc stock as of today is approximately 10.08%.
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, Invitation Homes Inc's dividend payout ratio is 1.23, which may suggest that the company's dividend may not be sustainable.
Invitation Homes Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Invitation Homes Inc's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 4 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. Invitation Homes Inc'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 Invitation Homes Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Invitation Homes Inc's revenue has increased by approximately 3.40% per year on average, a rate that outperforms approximately 61.74% 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, Invitation Homes Inc's earnings increased by approximately 53.00% per year on average, a rate that outperforms approximately 89.68% of global competitors.
Concluding Insights on INVH's Dividend Profile
With a solid track record of dividend payments, a commendable dividend growth rate, and a payout ratio that may prompt further scrutiny, Invitation Homes Inc presents a mixed but intriguing dividend profile. The company's profitability and growth metrics add layers of consideration for value investors. As the real estate market continues to evolve, the performance of companies like Invitation Homes Inc will be closely watched by those seeking stable income streams from their investment portfolios. Will Invitation Homes Inc maintain its dividend attractiveness in a fluctuating economic landscape? That remains a question for investors to ponder as they assess the company's financial health and strategic direction.
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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.
