TPG RE Finance Trust Inc (TRTX): An In-Depth Analysis of its Dividend Performance and Sustainability
Exploring the Dividend History, Yield, and Growth Rates of TPG RE Finance Trust Inc (NYSE:TRTX)
TPG RE Finance Trust Inc (NYSE:TRTX) recently announced a dividend of $0.24 per share, payable on 2023-10-25, with the ex-dividend date set for 2023-09-27. 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 deep dive into TPG RE Finance Trust Inc's dividend performance and assess its sustainability.
Overview of TPG RE Finance Trust Inc
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TPG RE Finance Trust Inc is a commercial real estate finance company. It originates, acquires, and manages commercial mortgage loans and other commercial real estate-related debt instruments. The company's objective is to provide attractive risk-adjusted returns to its stockholders over time through cash distributions and capital appreciation. It focuses on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high-quality commercial real estate properties undergoing some form of transition and value creation.
TPG RE Finance Trust Inc's Dividend History
TPG RE Finance Trust 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.
TPG RE Finance Trust Inc's Dividend Yield and Growth
As of today, TPG RE Finance Trust Inc currently has a 12-month trailing dividend yield of 13.89% and a 12-month forward dividend yield of 13.89%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, TPG RE Finance Trust Inc's annual dividend growth rate was -17.70%. Extended to a five-year horizon, this rate increased to -2.80% per year. Based on TPG RE Finance Trust Inc's dividend yield and five-year growth rate, the 5-year yield on cost of TPG RE Finance Trust Inc stock as of today is approximately 12.05%.
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 2023-06-30, TPG RE Finance Trust Inc's dividend payout ratio is 0.00.
TPG RE Finance Trust Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks TPG RE Finance Trust Inc's profitability 2 out of 10 as of 2023-06-30, suggesting the dividend may not be sustainable. 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. TPG RE Finance Trust Inc's growth rank of 2 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Revenue is the lifeblood of any company, and TPG RE Finance Trust Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. TPG RE Finance Trust Inc's revenue has increased by approximately -3.70% per year on average, a rate that underperforms approximately 70.8% of global competitors.
Conclusion
In conclusion, while TPG RE Finance Trust Inc has a commendable record of consistent quarterly dividends, the sustainability of these dividends is questionable. Factors such as a low profitability rank, poor growth prospects, and a revenue growth rate that underperforms most global competitors raise concerns about the company's ability to maintain its current dividend rate. Investors should consider these factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
