Unveiling the Dividend Story of Hannon Armstrong Sustainable Infrastructure Capital Inc
A Comprehensive Analysis of Hannon Armstrong Sustainable Infrastructure Capital Inc's Dividend Performance
Hannon Armstrong Sustainable Infrastructure Capital Inc (NYSE:HASI) recently announced a dividend of $0.4 per share, payable on 2023-10-11, with the ex-dividend date set for 2023-10-03. As investors eagerly anticipate this forthcoming payment, it's essential to delve into the company's dividend history, yield, and growth rates. This article, drawing on data from GuruFocus, will provide an in-depth analysis of Hannon Armstrong Sustainable Infrastructure Capital Inc's dividend performance and its sustainability.
Understanding Hannon Armstrong Sustainable Infrastructure Capital Inc's Business
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Hannon Armstrong Sustainable Infrastructure Capital Inc provides debt and equity financing to the energy markets in the United States. The company focuses on investments in two types of projects: energy-efficiency projects and renewable-energy projects. The former reduces the energy use and cost of a building or facility through the improvement or installation of various components, while the latter deploys cleaner energy sources such as solar and wind to generate power production. The company also provides financing solutions for other projects aimed at improving energy efficiency and the environment.
A Look at Hannon Armstrong Sustainable Infrastructure Capital Inc's Dividend History
Hannon Armstrong Sustainable Infrastructure Capital Inc has maintained a consistent dividend payment record since 2013, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2013, earning it the status of a dividend achiever. This honor is given to companies that have increased their dividend each year for at least the past 10 years. The following chart shows the annual Dividends Per Share for tracking historical trends.
Decoding Hannon Armstrong Sustainable Infrastructure Capital Inc's Dividend Yield and Growth
As of today, Hannon Armstrong Sustainable Infrastructure Capital Inc currently has a 12-month trailing dividend yield of 7.83% and a 12-month forward dividend yield of 8.02%. This suggests an expectation of increased dividend payments over the next 12 months. Hannon Armstrong Sustainable Infrastructure Capital Inc's dividend yield of 7.83% is near a 10-year high and outperforms 58.58% of global competitors in the REITs industry, making the company's dividend yield an attractive proposition for income investors.
Over the past three years, Hannon Armstrong Sustainable Infrastructure Capital Inc's annual dividend growth rate was 3.80%. When extended to a five-year horizon, this rate decreased to 2.40% per year. Based on Hannon Armstrong Sustainable Infrastructure Capital Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Hannon Armstrong Sustainable Infrastructure Capital Inc stock as of today is approximately 8.82%.
Is Hannon Armstrong Sustainable Infrastructure Capital Inc's Dividend Sustainable?
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, Hannon Armstrong Sustainable Infrastructure Capital Inc's dividend payout ratio is 2.80, which may suggest that the company's dividend may not be sustainable.
Hannon Armstrong Sustainable Infrastructure Capital Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Hannon Armstrong Sustainable Infrastructure Capital Inc's profitability 5 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported net profit in 9 years out of the past 10 years.
Future Prospects: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Hannon Armstrong Sustainable Infrastructure Capital Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Hannon Armstrong Sustainable Infrastructure Capital Inc's revenue has increased by approximately -7.70% per year on average, a rate that underperforms approximately 82.57% 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, Hannon Armstrong Sustainable Infrastructure Capital Inc's earnings increased by approximately -27.60% per year on average, a rate that underperforms approximately 83.44% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 2.90% underperforms approximately 52.78% of global competitors.
Final Thoughts
While Hannon Armstrong Sustainable Infrastructure Capital Inc's consistent dividend payments and notable yield make it an attractive choice for income investors, the sustainability of these dividends is questionable. The company's relatively high payout ratio and underperformance in growth metrics compared to global competitors suggest potential risks. Investors should consider these factors carefully when evaluating the company's dividend prospects. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
