Office Properties Income Trust's Dividend Analysis
Assessing the Sustainability of Office Properties Income Trust's Dividend
Office Properties Income Trust (NASDAQ:OPI) recently announced a dividend of $0.01 per share, payable on 2024-02-15, with the ex-dividend date set for 2024-01-19. 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 Office Properties Income Trust's dividend performance and assess its sustainability.
What Does Office Properties Income Trust Do?
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Office Properties Income Trust is a United States-based real estate investment trust. Its property portfolio is mainly composed of single-tenant office buildings, as well as multitenant properties, which are leased to parties of high credit quality characteristics. Its largest tenant is the U.S. government, followed by other smaller government entities and corporations. The company's properties are spread across the United States.
A Glimpse at Office Properties Income Trust's Dividend History
Office Properties Income Trust has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Office Properties Income Trust's Dividend Yield and Growth
As of today, Office Properties Income Trust currently has a 12-month trailing dividend yield of 35.84% and a 12-month forward dividend yield of 20.94%. This suggests an expectation of decreased dividend payments over the next 12 months.
Extended to a five-year horizon, this rate decreased to -22.90% per year. And over the past decade, Office Properties Income Trust's annual dividends per share growth rate stands at -13.40%.
Based on Office Properties Income Trust's dividend yield and five-year growth rate, the 5-year yield on cost of Office Properties Income Trust stock as of today is approximately 9.76%.
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, Office Properties Income Trust's dividend payout ratio is 0.00.
Office Properties Income Trust's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Office Properties Income Trust's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 6 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. Office Properties Income Trust'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 Office Properties Income Trust's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Office Properties Income Trust's revenue has increased by approximately -6.70% per year on average, a rate that underperforms approximately 81.19% of global competitors.
Final Thoughts: Evaluating Office Properties Income Trust's Dividend Profile
While Office Properties Income Trust's dividend yield is attractive, the negative growth rates and high yield on cost raise questions about the long-term sustainability of its dividend payments. Investors must weigh the company's current profitability and growth metrics against these dividend trends to make an informed decision. The payout ratio, while currently non-applicable, should be monitored for future insights into dividend sustainability. As the market environment evolves, Office Properties Income Trust's ability to maintain its dividends will hinge on its financial health and operational performance.
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.
