Stag Industrial Inc's Dividend Analysis
Exploring the Sustainability of Stag Industrial Inc's Dividend Payments
Stag Industrial Inc (NYSE:STAG) recently announced a dividend of $0.12 per share, payable on 2024-03-15, with the ex-dividend date set for 2024-02-28. 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 Stag Industrial Inc's dividend performance and assess its sustainability.
What Does Stag Industrial Inc Do?
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Stag Industrial Inc is a real estate investment trust that is involved in the acquisition and operation of both single- and multi-tenant properties, although the majority of the portfolio is single-tenant industrial properties throughout the United States. The vast majority of the company's real estate portfolio is comprised of warehouse and distribution buildings. Stag Industrial derives nearly all of its income in the form of rental income from its portfolio of warehouse and distribution properties. The company generates most of its rental revenue from its facilities located in Midwestern and Eastern U.S. cities. Stag Industrial's largest customers include air freight and logistics, automotive, and industrial equipment companies in terms of overall revenue.
A Glimpse at Stag Industrial Inc's Dividend History
Stag Industrial Inc has maintained a consistent dividend payment record since 2011, with dividends currently distributed on a monthly basis. The company has increased its dividend each year since 2011, earning the title of a dividend achiever. This distinction is reserved for companies that have increased their dividends each year for at least the past 13 years. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Stag Industrial Inc's Dividend Yield and Growth
As of today, Stag Industrial Inc currently has a 12-month trailing dividend yield of 3.87% and a 12-month forward dividend yield of 3.90%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Stag Industrial Inc's annual dividend growth rate was 0.70%, which increased to 0.80% per year over a five-year horizon. Over the past decade, the annual dividends per share growth rate stands at 2.50%.
Based on Stag Industrial Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Stag Industrial Inc stock as of today is approximately 4.03%.
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, Stag Industrial Inc's dividend payout ratio is 1.45, which may suggest that the company's dividend may not be sustainable. Stag Industrial Inc's profitability rank, as of 2023-09-30, is 7 out of 10, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.
Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Stag Industrial Inc's growth rank of 7 out of 10 suggests good growth trajectory relative to competitors. The company's revenue, as indicated by the revenue per share and 3-year revenue growth rate, has increased by approximately 4.40% per year on average, outperforming approximately 65.52% of global competitors.
Stag Industrial Inc'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, earnings increased by approximately 27.70% per year on average, outperforming approximately 83.18% of global competitors. Additionally, the company's 5-year EBITDA growth rate of 42.70% outperforms approximately 93.5% of global competitors.
Next Steps
In conclusion, Stag Industrial Inc's consistent dividend growth, moderate payout ratio, and strong profitability and growth metrics paint a promising picture for investors seeking reliable income streams. While the payout ratio may raise some concerns about sustainability, the company's solid financial and operational performance could provide a cushion against potential challenges. Investors should consider these factors, alongside broader market trends and individual investment goals, when evaluating Stag Industrial Inc as a potential addition to their portfolios. For those seeking high-dividend yield stocks, GuruFocus Premium offers a High Dividend Yield Screener to aid in the search.
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.
