Mid-America Apartment Communities Inc's Dividend Analysis
Insight into the Upcoming Dividend and the Company's Financial Health
Mid-America Apartment Communities Inc (NYSE:MAA) recently announced a dividend of $1.47 per share, payable on 2024-01-31, with the ex-dividend date set for 2024-01-11. 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 Mid-America Apartment Communities Inc's dividend performance and assess its sustainability.
What Does Mid-America Apartment Communities Inc Do?
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Mid-America Apartment Communities Inc, or MAA, is a real estate investment trust engaged in the acquisition, operation, and development of multifamily apartment communities located in southeastern and southwestern United States. The company operates two reportable segments; Same Store includes communities that the company has owned and have been stabilized for at least a full 12 months as of the first day of the calendar year, and Non-Same Store and Other includes recently acquired communities and other categories. Key revenue comes from the Same Store segment.
A Glimpse at Mid-America Apartment Communities Inc's Dividend History
Mid-America Apartment Communities Inc has maintained a consistent dividend payment record since 1994, distributing dividends on a quarterly basis. The company has increased its dividend each year since then, earning the title of a dividend aristocrata status reserved for companies with at least 30 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Mid-America Apartment Communities Inc's Dividend Yield and Growth
As of today, Mid-America Apartment Communities Inc currently has a 12-month trailing dividend yield of 4.28% and a 12-month forward dividend yield of 4.48%, indicating an expectation of increased dividend payments over the next 12 months. Over the past three years, Mid-America Apartment Communities Inc's annual dividend growth rate was 6.80%. This rate decreased to 5.40% per year over a five-year horizon, while the decade-long annual dividends per share growth rate stands at 5.50%. The 5-year yield on cost of Mid-America Apartment Communities Inc stock as of today is approximately 5.57%.
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. As of 2023-09-30, Mid-America Apartment Communities Inc's dividend payout ratio is 1.09, which may suggest concerns about dividend sustainability. However, the company's profitability rank of 8 out of 10, along with consistent positive net income over the past decade, suggests good profitability prospects.
Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Mid-America Apartment Communities Inc's growth rank of 8 out of 10 indicates a good growth trajectory relative to competitors. The company's strong revenue model is evidenced by an average annual increase in revenue per share of 8.00%, outperforming approximately 77.29% of global competitors. Additionally, the 3-year EPS growth rate and 5-year EBITDA growth rate outperform a majority of global competitors, indicating a strong capability to grow earnings and sustain dividends.
Engaging Conclusion
In conclusion, Mid-America Apartment Communities Inc's consistent dividend growth, coupled with a robust profitability rank and promising growth metrics, presents a compelling case for investors seeking stable income streams. While the payout ratio warrants monitoring, the company's financial health and growth trajectory provide reassurance about the sustainability of future dividends. Value investors considering Mid-America Apartment Communities Inc should weigh these factors in their investment decisions. Will the company continue its aristocratic dividend growth, and what strategic moves will it make to ensure this? For further dividend investment opportunities, GuruFocus Premium users can explore our 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.
