Unveiling Boston Properties Inc's Dividend Prospects: A Deep Dive Analysis
Assessing the Sustainability and Future of BXP's Dividend Performance
Boston Properties Inc(NYSE:BXP) recently announced a dividend of $0.98 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-09-28. 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 deep dive into Boston Properties Incs dividend performance and assess its sustainability.
Understanding Boston Properties Inc's Business Model
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Boston Properties owns over 190 properties consisting of approximately 54 million rentable square feet of space. The portfolio is dominated by office buildings and is spread across major cities such as New York, Boston, San Francisco, Los Angeles, Seattle, and the Washington, D.C., region. The real estate investment trust also owns limited retail, hotel, and residential properties.
Tracing Boston Properties Inc's Dividend History
Boston Properties Inc has maintained a consistent dividend payment record since 1997. Dividends are currently distributed on a quarterly basis.
Boston Properties Inc has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 13 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dissecting Boston Properties Inc's Dividend Yield and Growth
As of today, Boston Properties Inc currently has a 12-month trailing dividend yield of 6.67% and a 12-month forward dividend yield of 6.67%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Boston Properties Inc's annual dividend growth rate was 0.80%. Extended to a five-year horizon, this rate increased to 4.70% per year. And over the past decade, Boston Properties Inc's annual dividends per share growth rate stands at 6.20%.
Based on Boston Properties Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Boston Properties Inc stock as of today is approximately 8.39%.
Evaluating Dividend Sustainability: 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, Boston Properties Inc's dividend payout ratio is 0.93. And this may suggest that the company's dividend may not be sustainable.
Boston Properties Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Boston Properties Inc's profitability 8 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Forecasting Future Dividends: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Boston Properties Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Boston Properties Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Boston Properties Inc's revenue has increased by approximately 1.20% per year on average, a rate that outperforms than approximately 51.57% 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, Boston Properties Inc's earnings increased by approximately 17.80% per year on average, a rate that outperforms than approximately 68.87% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 9.30%, which outperforms than approximately 64.71% of global competitors.
Concluding Thoughts
In conclusion, Boston Properties Inc has demonstrated a consistent dividend payment history and a promising growth trajectory. However, the high payout ratio and the potential sustainability of its dividend are areas that investors should monitor closely. Despite these concerns, the company's robust profitability and growth metrics suggest a promising future. As always, investors are advised to conduct their own comprehensive analysis 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.
